Mothercare to Close 111 Stores in Face of 9.5% Drop in UK Q4 Sales

Mothercare will close 111 stores and cut more than 700 jobs in the UK as it continues to struggle with falling sales.

The struggling retailer will close 36 Mothercare and 75 Early learning Centre sites, "reshaping" its UK system around a profitable core of 200 stores. It aims to see a £13m improvement in UK profits by March 2015 following the closures.

The move comes as the company announced a further plunge in like-for-like UK sales, dropping 9.5 percent in the 12 weeks to March 13, in contrast to a 18 percent increase in international sales.

Executive chairman Alan Parker claimed the closures, which will hit 730 jobs, will kickstart a "three-year turnaround". He was confident the company would deliver a sustained recovery and long-term success.

He said: "This will see us operate a lean, more competitive, business, focused on the existing profitable stores in a smaller UK portfolio, combined with a state-of-the-art online platform."

He added that the retailer was performing well internationally, with sales overseas increasing by 16 percent in the last year, following the opening of 134 stores outside the UK. The company has 1,028 stores in 58 countries outside the UK.

The remaining profitable UK sites will be split between 95 out-of-town sites and 105 high street locations. The store reductions follow 62 closures that have taken place over the financial year, 59 of them Early Learning Centres.

"Since November, a significant amount of progress has been made across the business," Parker said

"We launched a structural and operational review, appointed a new CEO [ former Lovefilm boss Simon Calver], closed a significant number of underperforming stores and commenced a consultation programme to streamline our head office function."

Calver's appointment, coupled with plans to launch a new UK website and 30 new overseas sites, demonstrates the company's plan to increase online growth as shoppers continue to shun the high street.

The retailer's poor UK performance does not appear to have scared off investors keen to bank on its increased international growth. Shares in Mothercare plc were priced at £176.19 at 9am, an increase of 12.9 percent.