A year into Mothercare’s turnaround and chief executive Simon Calver’s plan is gaining traction. It’s been a busy year for Calver’s team, Retail Week takes a look at what changes it’s made.
The retailer, which was viewed as more expensive than its big rivals at the grocers and online players such as Amazon, has introduced a value clothing line which already accounts for 20% of clothing sales. It has also introduced cheaper products in the big ticket travel sector and has launched its £250 Xpedior pram. Customers have responded well to its renewed focus on value and price perception has improved according to Calver, who admits it needs to work on this. To communicate its value credentials Mothercare has started to publicise its Price Promise in-store.
Calver has brought in a shiny new management team to lead his turnaround. UK managing director Mike Logue exited earlier this year as Calver took a more direct role in retail to oversee the turnaround. Most recent recruit chief financial officer Matt Smith, former finance boss at Argos, completes Mothercare’s senior team. Calver has also brought in Philippe Dayraud as director of product and sourcing, Jude Bridge as director of marketing and former Carphone Warehouse UK boss Matt Stringer who joined as commercial director last month. Calver says: “We’ve got the A team in place”.
Coming from Amazon-owned DVD etailer Lovefilm, online was bound to be one of Calver’s priorities. And he had a lot to work on at Mothercare which had experienced a sales decline online. Direct at Home sales were one of the big highlights in Mothercare’s fourth quarter update with sale jumping 18.2%. The retailer has launched a new web platform which is “bedding in well” according to Calver. He has also ramped up its delivery service and now offers click-and-collect in 40 of its stores which will be extended to all outlets by June.
The maternity specialist is in the process of culling 110 stores which should leave it with a core of 200 profitable stores. So far this year it has shuttered 56 loss-making store – the majority of which are Early Learning Centres - which is ahead of its original target. The retailer will become increasingly profitable as it closes its loss-making stores.
The retailer, which has been criticised for its dilapidated store estate, has also invested in a new store format at Edmonton in north London which trials elements such as in-store cafes. It is to extend that format to a further two stores going forward.