Mothercare To Close Almost 30% Of Stores

Online, May 24, 2011 (Newswire.com) - Mothercare has blamed internet competition combined with rocketing rental prices for its loss in profits. This comes at a time when many high street stores are also reporting profit slumps due to rising petrol and cotton prices. Following its most recent profit slump Mothercare is to close up to 110 stores in Britain by 2013.

But, all is not lost for Mothercare who has a new business strategy. It is to open stores in out of town areas in addition to increasing its online shopping capabilities in order to claw back some profit. Traders in general have noted a move away from high street shopping with customers preferring to shop from the comfort of their own homes. Mothercare is confident its new business approach will account for this.

Mothercare is also planning to focus its attention on opening more overseas stores in countries where high street sales are still dominant and internet sales aren't as prevalent as in the UK. In addition to this Mothercare has noted that over 90% of the world's babies are born outside of the UK so promoting overseas business should increase revenue dramatically. China and India are the top markets to crack with high populations and pockets of middle class wealth. Mothercare can pair this business strategy up with its other store the Early Learning Centre providing even further scope and profit.

Experts at Devonshire and Douglas Capital Partners believe that the new business strategy will prove successful. The move comes at a crucial time considering profits have dropped from £36.1 million to £11.1 million in the last fiscal year. However Mothercare's overseas profits increased substantially adding further weight to their new strategy.

Mothercare is to open up to 200 stores in India by 2015 in addition to increasing the number of stores in China and Latin America. In the next financial year Mothercare is hoping top open 150 new stores abroad hopefully increasing its growth in sales to 20%.

In early 2011 Mothercare warned their annual profits would be substantially lower than expected. Its new business strategy is set to allay shareholders' fears and increase confidence in their global brand.