Mothercare shutting 107 stores

1984ReturnsForReal_2

http://www.bbc.co.uk/news/business-13436017


From the piece I would say that they want to give the impression they are not renewing a vast majority of the leases up for renewal in the next 2 years.

"in the fortunate position" of having 120 leases expiring in the next two years.

My bet is they use the retail parks & shopping centres coming up for renewal as a bargaining chip & disappear from the real "high street" forever.

Mothercare has said it will close more than a quarter of its UK stores over the next two years as part of its plans to reduce its High Street presence.
The company also reported a slump in full-year profits as UK sales fell due to bad weather in the run-up to Christmas and increased competition.
This meant the group had to cut margins to shift unsold stock.
Pre-tax profits for the year to 26 March were £8.8m, down from £32.5m a year ago.
By March 2013, the company said it planned to have reduced its total store numbers to about 266 from 373.
It said it was "in the fortunate position" of having 120 leases expiring in the next two years.
The company said it should benefit to the tune of £4m to £5m a year after tax from the store closures.
The closures form part the group's ongoing strategy of reducing its High Street store portfolio and focusing more on out-of-town stores, and on its online and wholesale businesses.
International growth Like-for-like UK sales in the year to the end of March fell by 4% due to "adverse weather conditions in key trading weeks before Christmas, together with a general weakening in the consumer environment and increased competition", the company said.
This led to clearance sales of autumn and winter stock, in particular toys, which hit profit margins.
As a direct result, Mothercare said underlying profit in the UK for the period was £11.1m compared with £36.1m a year earlier.
However, against this disappointing UK performance, the company said it had seen a "record year internationally", with total sales up 16.3%.
This helped to drive a small increase in revenue to £793.6m.
"In the new financial year, we expect international to continue to grow retail sales by 15% to 20% with 150 new store openings," said chief executive Ben Gordon.
Earlier this year, the company warned that full-year profits would be significantly lower than market expectations.

MrsCrafty

I think people have cottoned on to the fact that they are way overpriced.

Generali

KESA have announced that Comet is up for sale and the consensus seems to be that Dixons stores have a negative value assigned to them in the stock valuation: the liability of being locked in to pay rent for years is greater than the expected profits from the stores.

1984ReturnsForReal_2

Generali wrote: »

KESA have announced that Comet is up for sale and the consensus seems to be that Dixons stores have a negative value assigned to them in the stock valuation: the liability of being locked in to pay rent for years is greater than the expected profits from the stores.

Its been a long while since I have seen a Comet store on the real high street so perhaps we are witnessing the collapse of the more unpopular retail parks?

Generali

1984ReturnsForReal wrote: »

Its been a long while since I have seen a Comet store on the real high street so perhaps we are witnessing the collapse of the more unpopular retail parks?

I guess these chains are getting squeezed between Tesco and the internet.

There's little point I can see in buying mid-market electronics these days. Either get the dogs whatsits and make it last a good few years or get yourself to Tesco for a £20 DVD player and accept that it's disposable.

Graham_Devon

Mothercare is overpriced. You just have to be wise to it and use the various vouchers form the net and go in with them. There are some good prices on some things though, and with kids, you often can't wait around and need the item that day.

So surprised to see them winding down the stores. Hope my local one remains in all honesty. Sometimes don't mind paying that little extra to be able to see, touch and try the item out before buying it, especially as it's for the most precious person in the world!!

michaels

Yep - reading this from the BBC suggests that overall expenditure of baby goods is not falling so more evidence of the squeeze of the middle-market.

Traditionally this is bad news for the likes of Next, M&S, Argos and Sainsburys, one for stock pickers to keep an eye on.

Edit: forgot to post the link - doh: http://www.bbc.co.uk/news/magazine-13393192

Generali wrote: »

I guess these chains are getting squeezed between Tesco and the internet.

There's little point I can see in buying mid-market electronics these days. Either get the dogs whatsits and make it last a good few years or get yourself to Tesco for a £20 DVD player and accept that it's disposable.

chewmylegoff

Graham_Devon wrote: »

as it's for the most precious person in the world!!

you've never bought me a thing from mothercare [confused smiley]

1984ReturnsForReal_2

michaels wrote: »

Yep - reading this from the BBC suggests that overall expenditure of baby goods is not falling so more evidence of the squeeze of the middle-market.

Traditionally this is bad news for the likes of Next, M&S, Argos and Sainsburys, one for stock pickers to keep an eye on.

Is that everything on the high street apart from the Supermarkets & DIY?

Ooooooo lovely, the state of UK shopping to come...

shellsuit

Our small store in town has closed.

I'm not suprised though, there are 2 floors and only stairs to get to the 1st floor. How are people with prams meant to get up them??

I did ask and was told that I could leave my son in his pram with them and they would watch him while I went to browse. I refused because I wasn't prepared to leave him where I couldn't see him and what if they had to see to customers? What then?

The stupid thing is, that on the ground floor is clothing. Upstairs was prams/pushchairs, feeding and bathing equipment, toys etc ~ if they had sense, they would have put the clothes up there!

1984ReturnsForReal_2

shellsuit wrote: »

The stupid thing is, that on the ground floor is clothing. Upstairs was prams/pushchairs, feeding and bathing equipment, toys etc ~ if they had sense, they would have put the clothes up there!

I am sure they thought about which products went where to maximise revenue.