Mothercare, a leading baby products retailer, has announced that its interim CEO, Glyn Hughes, will be stepping down at the end of this month. Hughes expressed his interest in pursuing other opportunities and has withdrawn himself from consideration for the permanent CEO position. The company is currently in the process of conducting an executive search to find a suitable replacement.

Mothercare has been undergoing a significant transformation, shifting its focus from being a retailer to becoming a brand owner. As part of this transition, the company has closed all of its physical stores and has redirected its efforts towards becoming a profitable international franchise operation. Mothercare aims to operate in approximately 40 different international territories, generating revenues through an asset-light model.

Despite the challenges imposed by the ongoing Covid-19 pandemic, Mothercare remains optimistic about its future. The company gained valuable experience from the administration of its UK division last November, which has helped it effectively navigate the current crisis. As a testament to its progress, two-thirds of Mothercare’s global retail locations, which are operated by partners, have already reopened. The company is also engaged in constructive discussions with existing franchise partners to establish a more sustainable business model.

In addition, Mothercare is currently in talks with UK health and beauty chain Boots to finalize the details of a deal that would make Mothercare the UK franchisee. This strategic partnership is expected to further enhance Mothercare’s market position.

Ensuring financial stability is a top priority for Mothercare, and the company has taken steps to reduce costs associated with its properties. While it has not adopted the sale and lease-back strategy, Mothercare has reached an agreement to move to a smaller and more cost-effective head office. This decision is anticipated to reduce cash occupancy costs by approximately £900,000 per year. Furthermore, Mothercare has agreed to sub-lease a portion of its main warehouse to a third party, leading to monthly cash occupancy cost reductions of up to £220,000.

Chairman Clive Whiley has expressed confidence in Mothercare’s ability to overcome the challenges brought about by the pandemic. He commended the company’s efforts to manage cash flows and reduce costs, emphasizing that these measures will steer Mothercare towards profitability and long-term sustainability.

To summarize, Mothercare is steadily progressing in its transformation from a retailer to a brand owner. Despite the impact of Covid-19, the company remains dedicated to its objective of becoming a profitable international franchise operation. Mothercare is actively taking measures to ensure financial stability by reducing costs associated with its properties. Simultaneously, the company is actively seeking a new CEO to lead its future endeavors. With the support of its franchise and manufacturing partners, Mothercare is confident in its ability to overcome the challenges it currently faces and ultimately return to profitability.

Useful links:
1. Mothercare official website: https://www.mothercare.com/
2. Mothercare franchising information: https://www.mothercare.com/franchise-info/content/fcp-content