Mothercare closing UK stores to focus on overseas

The struggling British retailer Mothercare is cutting its losses in the United Kingdom and, after closing all of its 79 local stores, will focus its attention on its profitable overseas operations.

The company made the decision after calling in administrators from PricewaterhouseCoopers on Tuesday.

The BBC says 2,800 UK jobs could be lost; most are understood to be part-time positions.

While the company has struggled at home, where it lost more than 36 million pounds($46.3 million) in the last financial year, it has fared much better overseas where it has more than 1,000 stores in at least 40 countries. The company is likely to keep its London head office and around 50 local members of staff to oversee its international operations.

Mothercare, which specializes in selling products for mother and baby, opened its first store in 1961 and has been listed on the London Stock Exchange since 1972. But the company has been under pressure from supermarkets and online retailers for years.

Zelf Hussain, joint administrator and PwC partner, said high street stores would close in the coming "weeks and months".

"This is a sad moment for a wellknown high street name," he said. "No one is immune from the challenging conditions faced by the UK retail sector. Like many other retailers, Mothercare has been hit hard by increasing cost pressures and changes in consumer spending."

He said 2,485 retail jobs would go, along with 384 head office positions and, probably, additional jobs at outsourced warehouses and call centers.

"It's with real regret that we have to implement a phased closure of all UK stores," he said. "Our focus will be to help employees and keep the stores trading for as long as possible."

The company is hoping to continue to sell some of its products in the UK through other retailers and online.

Clive Whiley, Mothercare's chairman, said expensive rents and a tax on business premises were a challenge, as was the tendency of people to shop online. But he insisted that, internationally, the company would emerge from the administration process with a sustainable future.

He said there was"deep regret and sadness that we have been unable to avoid the administration of Mothercare" and that "Mothercare UK continues to consume cash on an unsustainable basis", despite changes made during the past 18 months that contributed to a reduction in net debt.

Mothercare bought rival chain Early Learning Centre in 2007 and, at the time, had more than 400 stores in the UK.

Mothercare said in a statement: "The ongoing group will drive a greater focus on strengthening its global brand, improving the product design, marketing, and distribution of Mothercare products around the world to its franchisees."