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Mothercare finds its way back

Baby and children's retailer Mothercare is in recovery mode with a new boss and strategy
May 22, 2015

Mark Newton-Jones has just celebrated his one-year anniversary as the boss of Mothercare (MTC). It has been a tumultuous period, including a rights issue, a management reshuffle and a hostile takeover bid from US rival Destination Maternity. But the hard work is now paying off: last year reported losses halved and underlying pre-tax profit (excluding restructuring and other one-off costs) rose 37 per cent to £13m.

IC TIP: Hold at 238p

This was largely thanks to better like-for-like sales - both in the UK and abroad - and stable gross margins. Management's decision to pull the plug on 31 lossmaking stores helped, and explains the slight dip in group sales. A refurbishment programme on those that remain is now under way. Mr Newton-Jones admitted some stores haven't had "so much as a lick of paint in nearly a decade". They should now get a facelift every five to seven years.

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