Retail chain Storehouse today failed to improve its profit for the first time in seven years as ongoing problems at its Mothercare chain and a tough retail market pushed earnings down.
Group pretax profits fell to £98.6m for the 52 weeks to March 27, down from £125.1m at the same time last year. Turnover was flat at £1.328.6m, compared o £1.335bn for the 1997 financial year.
Storehouse chief executive Keith Edelman said the group’s profits had been hit by poor sales at its children’s chain. Profits at Mothercare dived to £17.9m from £31.4m, while sales fell to £472.4m from £481.3m.
A major restructuring plan, including the closure of 68 stores, would be carried out in the next 18 months in an effort to boost sales and profits, Edelman said. However, job losses among the 300 workers in the 68 stores would be kept to a minimum as the group planned to enlarge some of its existing stores by transferring business from those earmarked for closure.
More Mothercare World superstores would also be opened and other larger stores in the chain would be revamped in an effort to attract more customers.
Edelman added: “This restructuring programme will definitely help. Where we have refurbished our stores already we have seen clothing sales move ahead and sales in total move ahead.”
EGi News 20/05/99
