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Mothercare to close a quarter of UK stores | Mothercare to close a quarter of UK stores |
(40 minutes later) | |
Mothercare has said it will close more than a quarter of its UK stores over the next two years as part of its plans to reduce its High Street presence. | Mothercare has said it will close more than a quarter of its UK stores over the next two years as part of its plans to reduce its High Street presence. |
The company also reported a slump in full-year profits as UK sales fell due to bad weather in the run-up to Christmas and increased competition. | The company also reported a slump in full-year profits as UK sales fell due to bad weather in the run-up to Christmas and increased competition. |
This meant the group had to cut margins to shift unsold stock. | This meant the group had to cut margins to shift unsold stock. |
Pre-tax profits for the year to 26 March were £8.8m, down from £32.5m a year ago. | Pre-tax profits for the year to 26 March were £8.8m, down from £32.5m a year ago. |
By March 2013, the company said it planned to have reduced its total store numbers to about 266 from 373. | By March 2013, the company said it planned to have reduced its total store numbers to about 266 from 373. |
It said it was "in the fortunate position" of having 120 leases expiring in the next two years. | It said it was "in the fortunate position" of having 120 leases expiring in the next two years. |
The company said it should benefit to the tune of £4m to £5m a year after tax from the store closures. | The company said it should benefit to the tune of £4m to £5m a year after tax from the store closures. |
The closures form part the group's ongoing strategy of reducing its High Street store portfolio and focusing more on out-of-town stores, and on its online and wholesale businesses. | The closures form part the group's ongoing strategy of reducing its High Street store portfolio and focusing more on out-of-town stores, and on its online and wholesale businesses. |
International growth | International growth |
Like-for-like UK sales in the year to the end of March fell by 4% due to "adverse weather conditions in key trading weeks before Christmas, together with a general weakening in the consumer environment and increased competition", the company said. | Like-for-like UK sales in the year to the end of March fell by 4% due to "adverse weather conditions in key trading weeks before Christmas, together with a general weakening in the consumer environment and increased competition", the company said. |
This led to clearance sales of autumn and winter stock, in particular toys, which hit profit margins. | This led to clearance sales of autumn and winter stock, in particular toys, which hit profit margins. |
As a direct result, Mothercare said underlying profit in the UK for the period was £11.1m compared with £36.1m a year earlier. | As a direct result, Mothercare said underlying profit in the UK for the period was £11.1m compared with £36.1m a year earlier. |
However, against this disappointing UK performance, the company said it had seen a "record year internationally", with total sales up 16.3%. | However, against this disappointing UK performance, the company said it had seen a "record year internationally", with total sales up 16.3%. |
This helped to drive a small increase in revenue to £793.6m. | This helped to drive a small increase in revenue to £793.6m. |
"In the new financial year, we expect international to continue to grow retail sales by 15% to 20% with 150 new store openings," said chief executive Ben Gordon. | "In the new financial year, we expect international to continue to grow retail sales by 15% to 20% with 150 new store openings," said chief executive Ben Gordon. |
Earlier this year, the company warned that full-year profits would be significantly lower than market expectations. | Earlier this year, the company warned that full-year profits would be significantly lower than market expectations. |
Do you work at Mothercare? Will you be affected by the closures? Send us your comments using the form below. |