Tight cost control is a retail basic but on its own it’s rarely enough to build a business and persuade the shopper to open her purse.

Tight cost control is a retail basic but on its own it’s rarely enough to build a business and persuade the shopper to open her purse.

That’s evident at Mothercare, where years of cost-consciousness failed to deliver results.

Mothercare now plans a £100m rights issue that will allow new boss Mark Newton-Jones to implement the turnaround strategy upon which he has hung his hat.

Mothercare, as it said in the rights issue documentation, had been pursuing a policy of “cash management, cost reductions and the closure of loss-making space”.

Consequently, amid turbulent conditions that were changing the face of the maternity retail market, there was insufficient investment in essentials such as IT, the digital offer, stores that looked the part and desirable product.

In short, Mothercare was running out of reasons for mothers and mums-to-be to visit, whether online or in-store. It also caught the discounting bug as it battled to woo custom and profitability evaporated.

Newton-Jones’s strategy looks sound. Mothercare will continue to reshape its estate – about £25m of the proceeds from the rights issue will cover store closures.

More importantly, retained stores starved of investment will be refurbished and improvements such as better fulfilment options and improved personalisation will be made to the online offer.

Vitally, there will be improvements to the “quality and newness” of what Mothercare actually sells and a drive towards full-price sales by, for instance, carrying more exclusive product.

Mothercare has an opportunity. Its specialist market is in turmoil, as the problems of Kiddicare and Mamas & Papas have shown.

Mothercare’s current trading shows an improvement in UK like-for-like sales so the direction of travel is encouraging.

The challenge – as well as the opportunity – will be to expertly enact a plan that looks good on paper.

Mothercare to raise £100m from rights issue to invest in digital transformation