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17 May 2018

Mothercare announces 50 store closures in rescue plan

Mothercare has announced that it will close 50 of its stores as part of a restructure and refinance plan to rescue the national baby product retailer.

Roy Kaitcer, Investment Manager, said: “Mothercare is set to have 78 outlets by 2020, having halved the number of stores over the past five years. They have struggled in the face of rising competition from the likes of Tesco, Asda’s George range selling babywear, as well as Primark and H&M selling popular ranges.

“It also appears Mothercare has lost touch with its clientele: new parents who are looking for advice and support haven’t been receiving it from their stores. The store also expanded too quickly two years ago, with a lot of legacy stores with 25-year leases that are no longer profitable.

“Their online offering also needs to improve, as online sales now account for around 40 per cent of its UK sales.

“It is a similar situation to the one we have seen with Carpetright, which recently announced it would close 92 of its 400 stores. By slimming down the number of stores, Mothercare can regain investors’ confidence.”

This comment is for information only and does not constitute a recommendation to buy or sell Mothercare shares.
Mothercare announces 50 store closures in rescue plan
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