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| Mothercare chief executive insists recovery on track despite fall in sales | Mothercare chief executive insists recovery on track despite fall in sales |
| (about 2 hours later) | |
| Mothercare is crawling towards a recovery as chief executive Simon Calver insisted the UK company was on target to break even within two years. | Mothercare is crawling towards a recovery as chief executive Simon Calver insisted the UK company was on target to break even within two years. |
| The mother and baby goods retailer saw UK sales drop 11% to £500m last year. It reported a loss of £21.7m, a slight improvement on the £24.7m loss recorded in the previous 12 months. | |
| The business turned in an impressive international performance, with sales up more than 8% to nearly £730m and profit up 20% to £42m, with China, India and Russia expanding successfully. | The business turned in an impressive international performance, with sales up more than 8% to nearly £730m and profit up 20% to £42m, with China, India and Russia expanding successfully. |
| Total group sales, including wholesale operations, were down 0.3% to £1.23bn with profits of just £8.3m. | Total group sales, including wholesale operations, were down 0.3% to £1.23bn with profits of just £8.3m. |
| Calver said the company must slim down its store portfolio. He closed 56 stores last year, and plans a further 30 closures this year. The chain currently has 255 UK stores, but he hopes to whittle that down to 200. There are 1,300 outlets worldwide. He explained: "This is the first [year] of a three-year turnaround. We needed to shut down those stores because they were loss-making and traditionally we've had too many." | Calver said the company must slim down its store portfolio. He closed 56 stores last year, and plans a further 30 closures this year. The chain currently has 255 UK stores, but he hopes to whittle that down to 200. There are 1,300 outlets worldwide. He explained: "This is the first [year] of a three-year turnaround. We needed to shut down those stores because they were loss-making and traditionally we've had too many." |
| Most of the closures have been Early Learning Centres, with the brand being integrated into Mothercare stores. The remaining loss-making stores due to close are mainly in high street locations rather than out-of-town centres. | Most of the closures have been Early Learning Centres, with the brand being integrated into Mothercare stores. The remaining loss-making stores due to close are mainly in high street locations rather than out-of-town centres. |
| In recent years Mothercare has struggled with competition for accessories and buggies from online stores such as Kiddicare, while supermarkets have launched lines of baby and children's clothes. | In recent years Mothercare has struggled with competition for accessories and buggies from online stores such as Kiddicare, while supermarkets have launched lines of baby and children's clothes. |
| Calver hopes to increase online sales, using his skills as the former boss of Lovefilm, alongside new chief finance officer Matt Smith, who used to work for Argos. | |
| Last year internet sales grew 4%, with 40% of orders made through the new mobile phone app, and click-and-collect services have been rolled out across all stores. | |
| However, some analysts were less convinced the company can turn itself around, suggesting the plan was too ambitious. | However, some analysts were less convinced the company can turn itself around, suggesting the plan was too ambitious. |
| Panmure Gordon analysts said: "It remains to be seen whether management has closed the right stores. We continue to believe that Mothercare will struggle to break even in the UK according to its own timetable." | Panmure Gordon analysts said: "It remains to be seen whether management has closed the right stores. We continue to believe that Mothercare will struggle to break even in the UK according to its own timetable." |
| The shares closed down 9p at 355p, although, they have more than doubled since Calver joined the company. | The shares closed down 9p at 355p, although, they have more than doubled since Calver joined the company. |