NEWS

Mothercare to almost halve number of UK stores

Published on: 22nd May 2017

Retailer will also stop selling clothes for older children as it tries to create a profitable future.

Mothercare-480Mark Newton-Jones, Mothercare chief executive, said it would look to close up to 70 of its 152 UK stores as it adapts to a digital age where 41% of sales are rung up online.

“We are taking a fresh look at our estate and asking how many do we really need?” said Mark. “We’ve got six stores in Bristol – we don’t need six stores in Bristol. In Sheffield we’ve got five within a 20-minute drive time when we only need one or two. To cover all the major conurbations you only need 80 to 100 stores.” Since taking the helm in 2014, Newton-Jones has closed 100 loss-making UK outlets and modernised 70% of the remaining stores.

Rather than competing in the cutthroat general kidswear market, his strategy has focused on the lucrative niche of expectant parents and the paraphernalia required for newborns and toddler. Stores will now stop selling clothes or toys for children older than four.

At the start of this decade there were close to 400 UK Mothercare stores, but successive management teams have whittled away at that figure as the retailer struggled to compete with incursions by supermarkets and Amazon.
Pruning the UK chain, which has racked up losses of close to £100m over the last six years, has put it on the road to recovery with analysts predicting it will move into profit next year.

In recent years Mothercare has been forced to fall back on the success of its large overseas business but that is now facing headwinds of its own as shoppers in the Middle East – its biggest regional market outside the UK – spend less because of the slump in the oil price.

Pre-tax profits at Mothercare were flat at £19.7m on sales of £667.4m in the year to 25th March. Within that, UK losses narrowed to £4.4m from £6.4m a year ago, while underlying profits at its international business declined 13% to £35.2m. UK like-for-like sales were up 1.1%. The shares closed down more than 3% at 124p.

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