MOTHERCARE revealed yesterday it is to close a further 111 stores in the UK and suspend its dividend as part of the embattled retailer’s efforts to revive its fortunes.
The baby products chain, which is facing intense competition from online retailers and supermarkets, already announced plans last year to close 110 of its 273 branches by 2013.
However, chairman Alan Parker said yesterday that after closing 62 stores in the year to March, the group planned to scale back its UK estate to just 200 stores by 2015 – consisting of 173 Mothercare branches and 27 Early Learning Centres.
The retailer, which has renegotiated its banking facilities with its lenders, said the cost saving programme would cost around £35m.
The move is expected to boost profits by £13m by March 2015 and shave-off £20m in non-store overheads on an annualised basis.
Mothercare made the announcement as it reported a steeper decline in fourth quarter UK like-for-like sales, down 8.2 per cent compared with a 5.2 per cent decline in the previous quarter.
Despite problems in its home market, Mothercare’s overseas business has continued to thrive, with like-for-like sales up by 18 per cent in the fourth quarter of the year.
The closures are part of the strategic review being undertaken by Alan Parker. Simon Calver, who joins as chief executive from Lovefilm later this month, will give full results of the strategic review in May.
A hint of the review plans to come sent shares up 7.8 per cent to 183p.