Mothercare's shares may have fallen 60% in the last year, however, they were up today by 4% after their announcement on shop closures. The shares are now trading up over 10% at 188p. City likes Mothercare's restructuring news, but will customers?
After the closures, Mothercare will have 200 stores - 95 out of town and 105 on the UK high street. The company aims to grow with 1000 stores created abroad. The retailer have not yet announced which stores will close in the UK.
Mothercare has pledged to accelerate its international expansion, as part of their transformation strategy. Sales have been propped up by a strong performance overseas, where it has 1,000 stores, with international sales growing 18% in the fourth quarter, despite the closure of 11 stores.
The update comes weeks before Simon Calver, the former boss of internet movie rental company Lovefilm, becomes chief executive in an appointment that has signalled the parenting group's drive to boost its online presence.
The group has said it will launch combined online and in-store customer options with its new UK website, which is on track for launch in the first half of the next financial year, as well as 30 new overseas websites.
The Executive Chairman of Mothercare has said the closing of 111 stores would help "restore the UK business back to profit". Alan Parker said that having a smaller 'UK portfolio' would help to operate a "lean, more competitive business". Mr Parker said:
"Since November, a significant amount of progress has been made across the business. We launched a structural and operational review, appointed a new CEO, closed a significant number of underperforming stores and commenced a consultation programme to streamline our head office function.
Today we have announced the framework of our decisive three year strategy to restore the UK business back to profit and strengthen our foundations for growth. This will see us operate a lean, more competitive business, focused on the existing profitable stores in a smaller UK portfolio, combined with a state of the art online platform."