Mothercare boss Mark Newton-Jones has hailed the past year a “watershed moment” for the nursery specialist.

The retailer saw UK losses narrow in the year to March 25, 2017, with much-increased profitability in the second half.

Like-for-like sales in the UK grew 1.1%, compared to a 3.6% uplift the previous year, while total UK sales were flat at £459.4m.

Mothercare’s international business has traditionally been challenging and this year was no exception.

While much of the retailer’s overseas business performed well, a tough Middle-Eastern market dragged down its performance.

Turnaround plan in action

But Newton-Jones today hailed the second half of the retailer’s transformation plan, emphasising the UK performance.

He told Retail Week: “This is a watershed moment, a pivotal moment in our recent history, really.

“We were losing £25m a few years ago and to see that come back means that the first phase of our turnaround is complete.

“The second phase is the really exciting bit, the stuff that we have been working on in the background. We see a business that will be very different in the way it trades.”

Newton-Jones added that the business is now focused on customer catchment areas and is taking a regional approach to its store estate, which has shrunk by nearly 100 outlets since he took over as chief executive.

Store-estate shrinkage

He added that he expected the current store estate, which numbers around 150 outlets, to shrink to between 80-100 over the next five years.

“We have been renegotiating all our leases,” Newton-Jones said.

“We now have an average lease of five years while some retailers, particularly large department stores, are staring down the barrel of a 25-year average. That gives us so much flexibility, strategically.”

He added that the retailer was now focused on in-store events and “building a community around the brand”, something it “couldn’t have even considered three or four years ago”.