Mothercare is to close a further 110 UK stores as part of its turnaround strategy as its full year UK like-for-likes plunge.
The full strategy, set to be revealed by new chief executive Simon Calver at its prelims next month, will focus on reducing its UK costs and running a profitable 200 store business. The retailer currently operates 311 UK stores.
The retailer is also set to accelerate its international expansion and ramp up its multichannel credentials worldwide.
The closures, which come on top of the 62 stores it shed in its last financial year, will leave the maternity group with 95 out-of-town and 105 high street stores.
The bulk of its store closures will be of its Early Learning Centre fascias. The group believes the move will add £13m to profits by 2015.
Mothercare executive chairman Alan Parker said: “Mothercare is a great global brand with strong international partners. Today marks the beginning of a three-year turnaround and I am confident we will deliver a sustained recovery and long term success.”
It is investing £35m in cutting stores and saving costs and has refinanced with its banks to fund the turnaround.
The retailer has already started reducing its overheads and aims to slash costs by £20m over the next three years. It has started a consultation last month, to cut head office payroll costs by 16%.
The maternity specialist’s UK like-for-likes plunged 6.2% in the 53 weeks to March 31, as total UK sales dropped 6.2%.
UK like-for-likes worsened in its fourth quarter, with an 8.2% decline. The retailer said this was down to it clearing excess Christmas stock.
It said its inventory levels were “tightly controlled” with UK stock 13% lower than last year. It experienced a UK gross margin improvement over the quarter.
However, the group was bolstered by a strong overseas performance. Its international retail sales soared 16% over the year which pushed total group sales up 0.7%.
Surging international sales, which were up 18% could not offset the decline in Mothercare’s fourth quarter when total group sales dipped 4.2%.