Mothercare could offload the troubled UK arm of the retailer, its boss admitted on Wednesday, after another drop in sales at home.
Chief executive Mark Newton-Jones, who is spearheading a turnaround, said: “If somebody were to come along and say, ‘we’d be interested to have a look at the UK,’ [and] they wouldn’t have done that a year ago, of course [we’d consider it].”
Same-store sales at the toys and baby clothes seller fell 8.8% in Britain in the quarter to March 30 as it accelerated its planned store closures, but the sales decline eased off slightly.
Newton-Jones plans to grow the international arm, which is profitable and in 48 countries, and wants to make the UK business “cash generative” within a year, making it more attractive for potential suitors.
The UK business could tempt private equity firms or another retailer. Grocer Sainsbury’s considered a deal for the whole of Mothercare, it emerged last year, but didn’t make an offer.
Mothercare, which has been losing money in Britain for more than a decade as shoppers increasingly shun the High Street, has 80 UK stores, down from 137 shops a year ago.
The chief said 30 more shops were up for rent reviews in the next three to four years and those could shut too. Some 1200 people have lost their jobs in the past nine months. “That was the tough part. The staff have been incredibly resilient and loyal,” Newton-Jones added.
It has faced increasing competition from online players and higher day-to-day costs to run the business.
Shore Capital analyst Clive Black said: “Mothercare is out of the surgical ward and heading for the calmer medical ward. That makes it a less fragile business but one that still needs care and attention.”
