Mothercare chief steps up closures
Mothercare’s new boss is to step up the retailer’s closure of loss-making stores as part of a £100m strategy to revive the UK business.
Mark Newton-Jones wants to create a digitally-led business supported by a modern store estate, but admits this will require the purging of more shops.
The company, which owns the Early Learning Centre (ELC) brand, is planning a core UK estate of 110 out-of-town stores and 50 in-town sites, with closures being offset by the opening of approximately 15-20 new stores or by relocations to larger, better located premises.
Mothercare reduced its UK estate to 220 stores at the end of March after closing 153 loss-making stores over the last three financial years.
A refit programme is also being planned to reverse under-investment which has meant 80% of the group’s UK store portfolio has not been refurbished in the last seven to eight years. The new look will introduce digital screens and video walls, iPads, customer Wi-Fi and click and collect enhancements.
Mr Newton-Jones will pay for the overhaul by tapping City investors for £100m in a rights issue, with the funds also going towards new systems and technology and reducing the company’s debt burden.
He said: “Our ambition is for Mothercare to become the leading global retailer for parents and young children. The support of our shareholders will allow us to deliver on this ambition.”
Mothercare’s UK business made a loss of £26.3m in its most recent financial year but this has been offset by its international business, where the company’s franchise partners operate around 1,500 stores in 60 countries.
Mr Newton-Jones ran the business on an interim basis from March before taking on the reins in July at a time when the group had just rejected a £266 million takeover approach from US firm Destination Maternity.
