Breaking News – Mothercare Announces Preliminary Results

Posted on 24 May, 2012 by Kirsten Kennedy

It has been a tough year for retail commercial properties, and not even the high street favourite Mothercare managed to escape the financial crisis currently plaguing Britain. With over 100 store closures in place for the next few years, the chain is attempting to save money and ride out the double-dip recession.

Today, Mothercare plc, which owns the Mothercare and Early Learning Centre brands, released a preliminary report regarding the group’s finances and the success, or otherwise, so far of its “Transformation and Growth” plan.

The results are slightly optimistic – worldwide network sales rose to £1,232.4 million, which is an increase of 6.4 per cent on the 2010/2011 financial year. This is largely thanks to their 318 Asian stores, and also branches found in the Middle East, Latin America and Africa.

Meanwhile, their “Transformation and Growth” proposals appear to indicate a strengthening of the core of the brand, and returning to key principles such as reducing non-store costs by £20 million and revolutionising their e-commerce – or, in other words, becoming more competitive in the world of online shopping.

Other strategies include expanding store base in profitable countries that are not suffering the ill effects of the Western economic crash, such as India, China, Russia and Brazil, and concentrating on restoring profitability to their 200 remaining UK commercial properties. This is to be done by launching innovative new products, working with staff to improve customers’ experience in store and encouraging repeat custom through excellent service and satisfaction.

Alan Parker, Chairman of Mothercare plc, says; “This has been a tough year for Mothercare and we have completed a comprehensive review of the business.

“Simon Calver has now joined as Chief Executive and I have reverted to the role of Non-Executive Chairman. Simon brings the right blend of turnaround skills and multi-channel global brand experience for Mothercare’s long term growth.

“Looking ahead to the immediate future the UK market remains challenging; however, International continues to grow. Our focus on cost reduction is a priority in achieving a performance improvement this year.

“Overall we now have a robust plan for transformation and growth with new, strong leadership capable of delivering the results.”

Unfortunately, as indicated by Mr Parker, the UK commercial properties within the chain continued to struggle. Compared to the 2010/2011 financial year, UK sales were down 4.6 per cent at £560 million, with like-for-like sales falling 6.2 per cent compared to the previous year. Although the financial year started well, UK sales deteriorated with each passing month, recording a loss of £24.7 million on 31st March 2012, compared to last year’s profit of £11.1 million.

Simon Calver, Mothercare plc’s new Chief Executive, said; “We have a long way to go, and the plan to bring the UK business back to acceptable levels of profitability will take three years.

“We need to invest in e-commerce, be ruthless with our non-store cost base and use our scale and growth worldwide to drive sourcing economies and pass these savings onto the customers to improve our value for money around the world. Everything we do will enhance customer value, experience and loyalty in each of our 59 countries.

“My team and I are up for the challenge and, whilst there is much to do in this difficult economic climate, I look forward to delivering the ‘Transformation and Growth’ plan.

“As a team, this will be our most important delivery yet.”


Do you think the Mothercare brand is strong enough to ride out the double dip recession? Or, like so many others, do you think it is doomed to fail, joining classic British brands such as Woolworths, Aquascutum and Peacock’s in administration or bankruptcy?




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