Mothercare to cut number of high street stores
Retailer Mothercare has warned over a swathe of further high street store closures as it ramps up turnaround efforts, despite cheering its first UK profit for six years.
The baby care chain said it would slash its 152-strong UK store estate further to between 80 and 100 shops as it moves to the "second phase" of an overhaul.
Mothercare has already been axing loss-making shops and refurbishing its estate to boost flagging UK sales, having shut 21 stores in the year to March 25.
Chief executive Mark Newton-Jones said he wants stores to be focused on key locations nationwide, while acting as specialist advice and service points to support online sales.
He said: "We are clear in the role our stores will play for the future, by offering specialist advice and service and first class product presentation.
"Store numbers will reduce over time as we focus on a regional presence in key conurbations across the UK."
His turnaround efforts have been helping return the UK arm to health, with the group seeing its first underlying profit for six years in the final half of its financial year - with a surplus of £4.4 million.
The UK remained loss-making overall in the year, with underlying losses of £4.4 million after a "difficult" first half, but this was narrowed from losses of £6.4 million the previous year.
Mothercare cautioned there would be job losses as it shuts shops over the next five years, with cuts expected across the store workforce and head office under aims to become "leaner".
But the firm said it was unclear how many would be lost as it hopes to redeploy staff wherever possible.
Mothercare has already shut 100 shops as part of its overhaul launched three years ago, switching two-thirds of the store estate to out-of-town locations, while 70% has been refurbished.
It also plans to scrap ranges for older children, focusing solely on maternity, newborn babies and toddlers up to pre-school.
The firm's full-year results showed l ike-for-like sales rose by 1.1% in the UK, while its digital push helped online sales rise 7.8% over the year, accounting for 41% of UK sales.
The group said it was unclear what impact the Brexit squeeze on household finances will have on consumers, but said it will "inevitably flow into their household expenditure".
The group has already warned it expects to hike prices by between 3% and 5% from the middle of this year as it faces surging buying costs after the pound's plunge since the vote to leave the EU.
Its international arm has received a boost from the pound, which helped flatter sales over the year, up 10.6%.
But overseas sales on a constant currency basis fell 2.4% and underlying profits were 13% lower at £35.2 million.
Group-wide adjusted profits edged 1% higher to £19.7 million.