Deathwatch: Mothercare slump with £82m loss
Mothercare was always the biggest of the players on the baby product market, but these days, it really is looking beleaguered as they slumped to a huge £82m half-year loss. As such, they've slashed its dividend and warned that trading is showing no sign of improvement
Alan Parker, the executive chairman, has announced a massive review of the company, saying: "We have to rejuvenate the whole brand and offering. The competition in the UK is more intense than overseas. We need to review the format and location of our outlets in Britain."
This all comes on the back of long-standing chief executive Ben Gordon being forced out of the company following a series of grim profit warnings. To underline how bad things are, the company reported a pre-tax loss of £82m in the 28 weeks to October 8. The same time last year, they were making a £300,000 profit.
They have already announced plans to close around 110 stores in the UK over two years.
Where Mothercare have been falling down is on items such as push chairs and car seats which would normally generate big sale. Mr Parker said that sale are down on big ticket items; "partly [because] we live in tough economic times, and partly that the price of these buggies have been pushed a bit high." Analysts would add that Mothercare aren't offering deals as good as those found in supermarkets and, perhaps more worryingly, specialist websites (coughMumsnetcough) are offering superior information to young parents.
Could this be the end for something of a British high street institution?
TOPICS: High Street News