MOTHERCARE is pressing ahead with plans to cut more than one-third of its UK stores after reporting a £102.9 million loss.
However the retailer, which also owns Early Learning Centre, refused to say which shops it would be closing.
It reiterated the estate will reduce from 311 to 200 by 2015 with 36 Mothercare and 75 Early Learning sites expected to shut down, which will mean up to 750 job losses and savings of around £13m a year.
In Scotland it has 28 stores which are thought to employ more than 200 people. Underlying pre-tax profits slid 94% from £28.5m to £1.6m but exceptional charges of £104.5m, including restructuring costs and a £55m write down on the value of Early Learning, led to the large loss for the 53 weeks to the end of March this year.
Total sales increased 6.4% to £1.23 billion although UK sales dipped 4.6% to £560m.
New chief executive Simon Calver promised to continue expanding the international business, where sales were up 6.1% and which operates in 59 countries, and expects 20% annual growth from that division over the next three years. It turned in a strong performance with total sales rising 18% to £672.4m and underlying operating profits up 27% to £34.9m.
In the UK, where an £11.1m profit became a £24.7m loss, Mr Calver said the focus was on retaining the profitable stores and providing better value for customers.
He said: "The basis of this plan is very much on the things that we can control. Getting our value proposition right will, over the course of this plan, improve our like-for-like sales.
"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. We need to invest in e-commerce, 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."
Mr Calver also plans to eliminate up to £20m on non-store costs in areas such as distribution, head office and payroll. Mothercare has extended its banking facilities with HSBC and Barclays from £80m to £90m to fund its transformation plan.
Chairman Alan Parker said: "Our focus on cost reduction is a priority in achieving a performance improvement."
The shares ended the day up more than 23% to 203.5p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article