Disastrous holiday season
Mothercare closed 80 British stores in the past few years and sent out a profit warning in January after it had experienced a disastrous holiday quarter with group sales dropping 6.1 % worldwide because of “difficult trading conditions” and because it underperformed in important emerging markets like Russia and the Middle-East because of “unseasonal weather”.
Its like-for-like sales in Great Britain also dropped 4 % because of weaker footfall, price cuts impacting sales and margins and internet sales also dropped 1 % after the group had decided to eliminate the free delivery for its subsidiary Early Learning Centre, which it had taken over in 2007.
The then CEO Simon Calver had to admit that the full-year results would more than likely end up below current market expectations, an admission with damaging consequences. In a single blow, the company’s worth dropped 130 million euro on the stock exchange, forcing Calver to quit last month after only two years at the reigns.
Temporary CEO has to save company
While it looks for a new CEO, the British retailer has appointed Mark Newton-Jones as a temporary fix. He has experience as a 10-year CEO of Shop Direct, the group that runs mail order company Littlewoods and fashion web shop Very.com. He will begin working on 17 March and will remain in charge as soon as the board of directors has found a new CEO.
Mothercare currently has 191 Mothercare stores and 40 Early Learning Centres in Great Britain, with another 1,201 stores in 59 countries.
