Comrades, the online revolution continues!
Another major retailer is moving ‘from brick to click’ by recognising that the future of business growth lies less in the high street store, and more in the website, and internet sales.
This time it’s the Mothercare group, who will now follow Dixons, TK Maxx and Dublin’s Arnotts group, by ramping up investment in e-retail. The strategy reflects the relatively wide reach and low overheads of e-retail, compared to the crippling rents payable on high street stores, especially in an environment of international expansion.
Mothercare closed 62 of its UK stores last year, and is now planning to close a further 111 over the next 12 months. This will leave the maternity and toy retailer with 95 out-of-town stores and 105 high street shops. The majority of closures will be Early Learning Centre stores, which the retailer believes will result in a £13m profits boost by 2015.
The closures form part of a three-year turnaround strategy for Mothercare. In order to facilitate this growth strategy it is an e-retail expert, not a ‘bricks and mortar’ specialist, who is now joining the team.
Simon Calver, the former boss of online movie rental giant LoveFilm, will now join Mothercare as chief executive. He will drive forward the launch of new combined online and in-store customer services, a new UK website, as well as 30 international websites.
Mothercare’s UK like-for-likes plunged 6.2% in the year to 31st March. This included a particularly disappointing 8.2% fall in the fourth quarter, which the group said was due to clearing excess Christmas stock. There was good news too, however, as international sales soared 16% during the year, pushing total group sales up 0.7%.
Proof yet again that, not only is the word mightier than the sword – but the website can be mightier than the store!
from butterCloudHQ
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