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Ecommerce key to Mothercare transformation plan

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Investment in ecommerce will be at the heart of a three-year transformation plan designed to take Mothercare back to “acceptable levels of profitability,” the nursery retailer’s new chief executive said this week.

The plan, introduced by Simon Calver in his first full-year results presentation to the London Stock Exchange since joining on April 30, includes taking the Mothercare brand multichannel across its international markets.

The news came as Mothercare reported group sales of £812.7m in the year to March 31, up 2.4% on the £793.6m last year, and a pre-tax loss of £102.9m, down from a profit of £8.8m at the same time last year. Before a one-off exceptional charge of £104.4m, group underlying pre-tax profits came in at a “disappointing” £1.6m, down from £28.5m last time.

The company aims to become “one of the leading online players in the UK over the next three years.” It launched a new UK website on May 1. “We will be redeveloping and reconfiguring our delivery network, our technology teams and our loyalty and retention tools but we can and will get there,” said today’s Mothercare statement. It also aims to introduce websites in “all major international markets” over the next three years.

Other elements include introducing lean retail to reduce non-store costs by £20m a year by 2015 while focusing on a portfolio of 200 profitable stores and growing international sales by 20% a year in countries including India, China, Russia and Brazil.

“We have a long way to go, and the plan to bring the UK business back to acceptable levels of profitability will take three years,” said Calver.

“We need to invest in ecommerce, be ruthless with our non-store cost base and use our scale and growth worldwide to drive sourcing economies and pass these savings onto the customers to improve our value for money around the world.

“Everything we do will enhance customer value, experience and loyalty in each of our 59 countries.”

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