Mothercare to close more UK stores

 
City A.M. Reporter
Mothercare said it would close more UK stores as it seeks to restore profitability in its home market, after sales there slumped in the fourth quarter.

Last November the baby and mother retailer launched a strategic review of its British business having detailed plans in May to close about 110 stores over two years as leases expire.

It said on Thursday it would revamp its UK business to a profitable core of 200 stores.

Having closed a net 62 stores in its 2011-12 year it will now close 111 stores over the next three years to March 2015.

The firm forecast the closures would improve UK profits by about £13m by March 2015.

Mothercare said it has also identified savings in non-store overhead costs of at least £20m on an annualised basis by March 2015.

It said the store closures and cost savings will require an investment of £35m. A refinancing of its banking facilities has been agreed.

The firm said it would accelerate its international expansion.

Mothercare said UK sales tumbled in its fourth quarter, offsetting strong growth overseas.

The group, which issued three profit warnings last year and parted company with its chief executive, said sales at UK stores open over a year fell 8.2 per cent in the 12 weeks to 31 March.

That compares with a fall of 3.0 per cent in the third quarter.

International retail sales rose 18 per cent.

The firm said it would meet expectations for full year pre-tax profit.

Mothercare is battling intense competition in Britain from supermarkets and internet players as well as a weak consumer environment.

It has recruited Simon Calver, formerly the head of Amazon Inc's, LOVEfiLM International unit, to become its new chief executive. He starts on 30 April.

Shares in Mothercare, which have lost 60 per cent of their value over the last year,