Mothercare losses widen on costs of restructuring plan
The retailer is set to focus on building its global brand.
Losses at Mothercare have widened on the back of a drastic restructuring plan, but the company said it will now focus on rebuilding its brand.
Headline losses before tax came to £87.3 million for the 53 weeks to March 30, compared to £72.8 million this time last year.
Losses were deepened by the retailer’s store closure plan, which was agreed last year under a Company Voluntary Arrangement (CVA).
Mothercare said the programme had been completed ahead of schedule, reducing its UK estate from 134 stores to 79.
Worldwide sales, which includes international franchise partners and wholesale, slipped 7.9% to just over £1 billion.
Chief executive Mark Newton-Jones said: “We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business.
“The majority of that work is now done, including the completion of our store closure programme, leaving us with 79 stores which are well positioned to support our UK customer base.”
Mothercare was one of a number of retailers launching CVAs last year in a bid to shrink their store footprint.
Carpetright and New Look also shuttered shops using the process.
The wave of restructuring proposals has continued into the new year, with Sir Philip Green’s Arcadia launching closure plans earlier this week.
But Mr Newton-Jones said the company had seen some “improving UK trends” as the company begins to rebuild its brand.
“The next phase of our strategic transformation plan is to develop Mothercare as a global brand, maximising the opportunities we see across many international markets,” he said.
“At the same time our primary focus in the UK will be the development of our online proposition, the introduction of enhanced credit options and more exclusivity in product, coupled with a reinforcement of our specialist and service credentials.”
The group also announced earlier this year that it had agreed to sell the Early Learning Centre to The Entertainer for up to £13.5 million, with the proceeds being used to reduce debt.