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Retailer Spotlight - Mothercare


Posted At: 25 July 2016 00:26 AM
Related Categories: Retail, Retailers


Nursery retailer Mothercare is making steady progress on its turnaround plans, having reported its first statutory profit in five years in its latest financial year to March 2016. Although its latest quarterly results show a slight decline in sales, Mothercare said that fall reflected a 4.8% year-on-year reduction in space, as it continued to rationalise its UK store portfolio.

Having embarked on its turnaround strategy in 2014 which involved new chief executive, Mark Newton-Jones, over-seeing a six-point recovery plan that included a focus on digital and recapturing gross margin, Mothercare moved away from heavy discounting and turned its attention to restructuring its store portfolio and online operations to compete in the digital age.

Since 2014, Mothercare has rationalised its UK store portfolio, reducing from 220 UK stores in fiscal 2014 to 189 in fiscal 2015, and now to 170 in the year to March 2016. This figure includes eight Early Learning Centre stores.

While Mothercare has been busy closing under-performing stores in the UK, it has expanded its international footprint, rising from 1,221 international stores in fiscal 2014 to 1,273 stores in fiscal 2015, ending its current quarter with 1,322 stores. Of those, 958 were Mothercare stores while 364 were Early Learning Centre stores.

Having turned its attention to digital, Mothercare’s UK online sales now account for 25.5% of total UK sales. Last year online sales made up 32.7% of total sales. Mobile is responsible for 84% of online traffic and 61% of online sales.

It is clear from looking at the reduction in store count, the growth in overseas markets and the rising online sales, that Mothercare’s strategy for turning the business around was the right one. Given the current and ongoing challenges facing the high street at the moment, Mothercare will need to continue to innovate and use technology to continue to set it apart from its competitors in order to remain a sustainable business going forward.


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The opinions expressed herein are the personal opinion of the author and are not intended as statements of fact and do not represent the view of SnapShop or Pragma in any way.


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