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Mothercare to close half its UK stores

The British retailer continues to refocus its portfolio overseas.


Mothercare, which specialises in products for expectant mothers, has reported a 4.5 per cent rise in its worldwide network sales for the fourth quarter. But the struggling British retailer’s performance in the UK has continued to falter, with total sales in the country down 6.3 per cent and like-for-like sales falling 6.2 per cent during the year. In the fourth quarter alone, UK like-for-like sales dropped by 8.2 per cent; inventory levels remain tightly controlled and UK stocks are 13 per cent lower than last year.

As part of its cost-reduction programme, Mothercare has announced it will close 111 stores in Britain by March 2015 (36 Mothercares and 75 Early Learning Centres). The company has already cut 62 outlets this year. The new round of closures is expected to result in more than 700 job losses and will reduce the company’s UK portfolio to 200 stores. On an annualised basis, this reduction could improve Mothercare’s UK profits by around £13m in three years.

Elsewhere, the company has performed well. In the fourth quarter, worldwide network sales grew by 4.5 per cent, driven by an 18 per cent growth in international retail sales. Over the past year, Mothercare has opened 134 stores outside the UK: 27 in the Middle East, 20 in Europe, 76 in the Asia Pacific region and 11 in Latin America.

Alan Parker, executive chairman of Mothercare, said: “Since November, a significant amount of progress has been made across the business. We launched a structural and operational review, appointed a new CEO, closed a significant number of underperforming stores and commenced a consultation programme to streamline our head office function. We have also introduced immediate initiatives aimed at improving value and service for our customers. 

“Today we have announced the framework of our decisive three year strategy to restore the UK business back to profit and strengthen our foundations for growth. This will see us operate a lean, more competitive business, focused on the existing profitable stores in a smaller UK portfolio, combined with a state of the art online platform. Our international business continues to perform strongly and we plan to further accelerate growth.”