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Mothercare UK boss exits as retailer battles falling sales Mothercare UK boss exits as retailer battles falling sales
(35 minutes later)
Mothercare's UK boss is to leave the company as the mother and baby specialist retailer battles to turn around falling sales. Mothercare's UK boss is to leave the company as the parent and baby specialist retailer battles to turn around falling sales.
The departure of Mike Logue comes as Mothercare Australia, a business in which the UK-listed company owns a minority stake, called in administrators.The departure of Mike Logue comes as Mothercare Australia, a business in which the UK-listed company owns a minority stake, called in administrators.
The collapse of the Australian business is a blow for Mothercare as its international division has been driving growth in the last few years amid disappointing trading at home. Underlying UK sales slumped 5.9% in the 13 weeks to 12 January while international sales rose 12%. Online sales edged up just 0.9% during the period as the company failed to capitalise on shoppers switching to the internet.The collapse of the Australian business is a blow for Mothercare as its international division has been driving growth in the last few years amid disappointing trading at home. Underlying UK sales slumped 5.9% in the 13 weeks to 12 January while international sales rose 12%. Online sales edged up just 0.9% during the period as the company failed to capitalise on shoppers switching to the internet.
Mothercare Australia, which accounts for 7% of the group's international retail sales, was co-owned with the Myer family. The family had agreed a deal to buy the entire business but pulled out earlier this week claiming some conditions of the deal "were not fulfilled or waived".Mothercare Australia, which accounts for 7% of the group's international retail sales, was co-owned with the Myer family. The family had agreed a deal to buy the entire business but pulled out earlier this week claiming some conditions of the deal "were not fulfilled or waived".
It is understood the parent company also decided not to put more money into its Australian arm late last year when it wrote down the value of its investment by £10.6m. Mothercare said in a statement that the impact on profits was expected to be "minimal and does not change our overall view of international profitability going forward".It is understood the parent company also decided not to put more money into its Australian arm late last year when it wrote down the value of its investment by £10.6m. Mothercare said in a statement that the impact on profits was expected to be "minimal and does not change our overall view of international profitability going forward".
Simon Calver, Mothercare's chief executive, joined the business in April. He has said he wants to focus on returning the core UK business, which makes up 68% of sales, to profitability. Logue's departure is part of a restructure under which Calver will take more direct control of the UK business in a bid to step up the pace of change. Mothercare has hired Argos finance director Matt Smith as well as Sainsbury's executive Nick Henwood as director of retail operations as part of a major turnaround plan. The business made a loss of £103m in the year to March 2012 after one-off charges to cover the cost of the turnaround plan in the UK. It plans to close nearly 100 stores and improve its website and product ranges. Simon Calver, Mothercare's chief executive, joined the business last April. He has said he wants to focus on returning the core UK business, which makes up 68% of sales, to profitability.
Logue's departure is part of a restructure under which Calver will take more direct control of the UK business in a bid to step up the pace of change. Mothercare has hired former Argos finance director Matt Smith as CFO and ex-Sainsbury's executive Nick Henwood as director of retail operations as part of a major turnaround plan. The business made a loss of £103m in the year to March 2012 after one-off charges to cover the cost of the turnaround plan in the UK. It plans to close nearly 100 stores and improve its website and product ranges.