Mothercare To Close 111 Shops Over Three Years At Cost Of 730 Jobs

Mothercare To Shut 111 Stores WIth Loss Of 730 Jobs
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Struggling retailer Mothercare today said it will close another 111 UK stores over the next three years in a move impacting 730 jobs.

The mothers-to-be, babies and children's group revealed plans to cut the number of stores in the UK from 311 to 200, which will include 36 Mothercare sites and 75 Early Learning Centres, following months of weak trade.

The announcement came as the group revealed a further deterioration in UK like-for-like sales, which fell 9.5% in the 12 weeks to March 31, compared with 3% in the previous quarter.

However it said its worldwide sales were in a stronger position.

Alan Parker, executive chairman, said the changes will see the group transformed into a "lean, more competitive business".

He added: "Mothercare is a great global brand with strong international partners. Today marks the beginning of a three-year turnaround and I am confident we will deliver a sustained recovery and long-term success."

Mothercare said as part of its cost-reduction programme it would slash UK head office payroll costs by up to 16%, which will equate to around 90 roles.

The remaining 200 stores will be "profitable", the group said, and will comprise 95 out-of-town sites and 105 high street locations, while the closures will improve UK profits by £13m by March 2015.

Mothercare has already closed 62 stores in the current financial year, three Mothercare outlets and 59 Early Learning Centres.

The group secured a refinancing deal with its banks HSBC and Barclays to fund the store reduction programme, increasing lending from £80m to £90m.

While the group has suffered at home, it is being propped up by a strong performance overseas, where it has 1,000 stores, with international sales growing 18% in the fourth quarter.

As part of the transformation strategy unveiled today, Mothercare pledged to accelerate its international expansion.

The update comes weeks before Simon Calver, the former boss of internet movie rental company Lovefilm, becomes chief executive in an appointment that has signalled the parenting group's drive to boost its online presence.

The group today said it will launch combined online and in-store customer options with its new UK website, which is on track for launch in the first half of the next financial year, as well as 30 new overseas websites.