Mothercare is closing all its UK stores and online platform. For the half year UK sales fell by almost 20 per cent. The brand’s UK retail business has failed to deliver annual operating profit in over 10 years. Besides facing the same headwinds as most retailers did, Mothercare struggled to deliver a stable gross margin as 70 per cent of the UK’s shop floor space was given to partner brands in the baby category. The margin and the contribution from these brands reduced over time, and when Mothercare started introducing more higher margin Mothercare-branded product, it realised its shops were too large to fill with its own product alone. In the face of severe competition, the company tried to provide a higher level of exclusivity, but despite its efforts most of its third party products could be bought elsewhere at cheaper prices. The store estate was reduced to 80 locations last year as part of a series of company voluntary agreement but not enough trade transferred to the remaining stores or move online. Meanwhile, cash constraints throughout 2018 hampered the firm’s ability to launch an effective marketing campaign to restore its tarnished image.
Mothercare is focusing on building its brand by working more closely with its franchise partners and designing its product with the global consumer in mind.