Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Mothercare review will confirm chief executive’s future

Mark Newton-Jones is likely to be at the top of the list to become permanent chief executive at Mothercare if his plan for a turnaround of the troubled business is accepted by the board and investors, Drapers understands.

Newton-Jones has been interim chief executive for seven weeks and has a temporary contract until September. The former boss of Shop Direct is said to be working as though he is permanent and it is understood he is conducting a “root-and-branch” analysis of the baby and kids specialist. Although friends say he is “very interested” in leading the revival of Mothercare, it will only be if his strategy is accepted and supported. Also, as a plc, Mothercare must be seen to follow a proper recruitment process, so it would be wrong to assume he will be a shoo-in. Drapers understands there is likely to be a shortlist created in the next few weeks. 

He remains a very strong contender, however, as Mothercare needs a leader who has turnaround experience. Its international arm is highly successful. Its major problems are known to be in the UK where it has 220 stores, including the Early Learning Centre fascia. Drapers believes a significant number make a negative contribution.

Newton-Jones sold off the store estate at Littlewoods as part of the company’s turnaround. Only about 25% of Mothercare’s UK sales come from online and it is widely thought that this could be improved by Newton-Jones, who led the team that converted the conventional Littlewoods retailing business to the online and mail order- focused Shop Direct model with over 85% of sales online. He spent 10 years at the company, which followed an 18-year career at Next.

Despite recent press speculation about its banking covenants, Drapers understands that Mothercare is well supported by its banks and major investors. “The covenants are not an issue,” said an informed source. 

Press reports of a possible bid by the Alshaya group, which successfully partners Mothercare in the UAE and Russia, also seem overheated. “Alshaya has a huge affection for Mothercare as it was the first UK brand it took to the UAE in the 1980s, so of course it is interested in a secure future for the business,” said a Mothercare insider. “But the model it operates in Russia and the Middle East, where 80% of sales are in clothing and 20% in equipment, is totally different to the 30:70 split in the UK. Also it has no experience of running a retailing business in the UK, with its much higher rents, rates, employee costs…”

Analysts also doubt that Mothercare will be an attractive prospect for distressed retailing specialists like Hilco or Gordon Brothers, or private equity firms, because of its inherent problems and relatively small break-up value.

Mothercare is due to publish its latest preliminary results next week. Its UK business made an operating loss of £21.7m in the 2013 financial year.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.