Mothercare to close 110 stores in the UK
18 May 2011
Mothercare plc, the British retailer which specialises in products for expectant mothers and general merchandise for children yesterday unveiled plans to close 110 stores in the UK in the next two years and focus on out-of-town superstores and new wholesale business.
The Watford, Hertfordshire-based retailer said that it was "in the fortunate position" of having 120 leases expiring in the next two years and the closure would bring in savings around £4 million to £5 million a year after tax.
The closures is part the group's ongoing strategy of reducing its High Street store portfolio and allow it to focus on out-of-town parenting centres, direct and its new wholesale business, said the retailer in a statement.
Mothercare is not the only retailer hit by declining consumer spending in the UK. Music retailer HMV had said early this year that it would cut 60 stores in the UK, while electrical retailers Comet and Dixons have said that they would close 10 and 150 stores respectively.
Mothercare also reported a decline in full-year profits as UK sales fell due to bad weather weeks prior to Christmas and increased competition. Its pre-tax profits fell from £32.5 million to £8.8 million in the year to March, although its international business showed strong performance as sales surged by 16 per cent.
Pre-tax profits for the year to 26 March were £8.8 million, down from £32.5 million last financial year.
''In the new financial year, we expect International to continue to grow retail sales at 15-20 per cent with 150 new store openings. We expect the environment to remain challenging in the UK, although we will benefit from continued growth in Wholesale and Direct together with the acceleration of our property strategy, said Ben Gordon, CEO of Mothercare.''
