Despite revealing its first UK profit for six years, Mothercare has warned over further store closures across the UK as it continues its third year of turnaround efforts.
The mother and baby chain will cut its 152 UK stores to between 80 and 100 over the next five years. It has already shut 100 unprofitable branches as part of its overhaul launched three years ago, switching two-thirds of the store estate to out-of-town locations.
Chief executive Mark Newton-Jones said, ‘store numbers will reduce over time as we focus on a regional presence in key conurbations across the UK.’
Overhaul: Mothercare will close 50-70 stores in the UK as part its turnaround
They cautioned there will be job losses with cuts expected across the store workforce and head office in order to become ‘leaner’. But it had no details of where the closures might fall.
The group’s full year report showed a 1.1 per cent increase in UK sales, losses in the UK narrowed to £4.4million compared to £6.4 million the previous year.
Focusing on its digital growth, 41 per cent of UK revenues came from its online shopping platform. Sales were also aided by the launch of 10 new international websites during the year.
Chief executive Mark Newton-Jones wants stores to be focused on key locations nationwide
It also plans to stop ranges for older children, focusing exclusively on maternity, newborn babies and toddlers up to pre-school.
Mark Newton-Jones added: ‘following a difficult start to the year, the UK recovered in the second half, returning to underlying profit for the first time in six years.
The group said it was uncertain what effect the Brexit squeeze on household finances will have on consumers, but said it will ‘inevitably flow into their household expenditure’.
The group has already warned it expects to increase prices by between 3 per cent and 5 per cent from the middle of this year as it faces surging buying costs after the pound’s plunge since the vote to leave the EU.
Its international arm has received a boost from the pound, which helped improve sales over the year, up 10.6 per cent.