IT was the first port of call for generations of parents-to-be keen to stock up ahead of their new arrivals, but Mothercare is now the latest in a long line of retailers to call in the administrators as the downward spiral of the British high street continues.
We knew it was in trouble?
In May 2018 it said that following years of falling sales and profits, it was restructuring in a rescue deal with its creditors, but it seems more drastic action is required to keep the baby goods retailer afloat. It initially shut 55 shops in a Company Voluntary Arrangement (CVA), but is now calling in administrators, with 2,500 jobs at risk.
It didn’t stay ahead of the game?
With the seismic shift toward online shopping, Mothercare is just the latest UK store to fall victim to the rise of the web. It said its 79 stores were simply “not capable of returning to a level of structural profitability and returns that are sustainable”, with analysts saying the firm had been too slow to adapt.
There were too many stores?
During its heyday, the retailer expanded, but as times changed, it was left with a glut of outlets, in a similar scenario to the fall of Thomas Cook.
It faced stiff competition?
Children’s clothes are a hot market, with supermarkets selling low-priced ranges, while retail giant Primark has popular baby and children’s clothing in store. Mothercare brought in celebrity mothers Jools Oliver and Myleene Klass to sell their own clothing lines, but it hasn’t been enough.
Mothercare is a historic UK firm?
The specialist retailer of products for parents, babies and children up to the age of eight opened its first store in 1961 in Surrey. Initially, the focus was on prams, nursery furniture and maternity clothing, but it later expanded to include children's clothes, toys and home furnishings, as well as products for feeding and bathing.
What now?
Mothercare has been looking for a buyer for the UK stores. The company also operates in more than 40 overseas territories, which are not going into administration as international business saw profits of £28.3 million in the financial year to March, while UK business lost £36.3 million.
It’s not alone?
Figures suggest one in 10 shops in UK town centres are lying empty as footfall declines and business rates bite. It’s a situation that began with force during the credit crunch, with the demise of Woolworths in 2008 possibly the biggest loss to the high street. Thomas Cook collapsed earlier this year - although its brand has been purchased by a Chinese conglomerate - with other victims including Principles, Borders, Past Times and C&A.
And so the high street struggle goes on…
Justin King, the former boss of Sainsbury's, has called for VAT to rise to 22 per cent and for business rates to be halved in a bid to save the high street, helping retailers competing with online rivals who do not face the same tax.
MAUREEN SUGDEN
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