Jobs threat at Mothercare announced more store closures

STRUGGLING retailer Mothercare today revealed that it plans to close another 111 UK stores over the next three years, in a move threatening 730 jobs.

The mothers-to-be, babies and children’s products group revealed plans to cut its number of stores in the UK from 311 to 200, affecting 36 Mothercare and 75 Early Learning Centre sites, following months of weak trade.

The announcement came as the group revealed a further deterioration in UK like-for-like sales, which fell 9.5% in the 12 weeks to March 31, compared with 3% in the previous quarter.

Mothercare said as part of its cost-reduction programme it would also slash UK head office payroll costs by up to 16%, which will equate to around 90 roles.

The remaining 200 stores would be “profitable”, the group said, and would comprise 95 out-of-town sites and 105 high street locations, while the closures will improve UK profits by �13million by March 2015.

Mothercare has already closed 62 stores in the current financial year, involving three Mothercare outlets and 59 Early Learning Centre (ELC) stores.

A spokeswoman for the group said the identity of stores affected by the latest round of closures were not being revealed at this stage.

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Within Suffolk there are currently Mothercare stores in Ipswich, Bury St Edmunds and Lowestoft, and ELC outlets in both Ipswich and Bury St Edmunds,

The out-of-town Mothercare at Copdock Mill, Ipswich, includes ELC products but there is also a stand-alone ELC store in the Buttermarket in the town centre.

The group secured a refinancing deal with its banks HSBC and Barclays to fund the store reduction programme, increasing lending from �80million to �90million.

While the group has suffered at home, it is being propped up by a strong performance overseas, where it has 1,000 stores, with international sales growing 18% in the fourth quarter.

As part of the transformation strategy unveiled today, Mothercare pledged to accelerate its international expansion.

Alan Parker, executive chairman of Mothercare, said the changes would see the group transformed into a “lean, more competitive business”.

He added: “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.”

Today’s 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 today 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.