Mothercare CEO Mark-Newton Jones has resigned from his position as the group moves through the final stages of its transformation plan to become an international franchise operation.
The group said today (23 January), Newton-Jones would step down from his position effective immediately and would remain an executive director until July 2020 until the transformation plan is complete, thereafter remaining available as no-executive director.
Chief financial officer (CFO) Glyn Hughes will succeed him as interim CEO, while Andrew Cook, who has served as corporate development director of Mothercare since April 2019, will join the board as CFO.
Mothercare has been plagued with falling profits in recent years. In November, the group appointed PricewaterhouseCoopers as administrators to the Mothercare UK business and the Mothercare business services company. It also announced the closure of all 79 of its UK stores with the potential loss of around 2,800 jobs as it shifts its focus to its international business.
In a financial update of its first half it booked wider losses amid a drop in total revenue and falling international and domestic sales.
It subsequently announced Boots, the UK’s largest pharmacy-led health and beauty retailer, as its exclusive franchisee in the UK.
Today it said it has made “significant progress” with its transformation plan over the last 12 weeks and it is confident that, taking into account the shortfall in the cash realisations from the Mothercare UK administration process, the group’s financing requirements are well within the overall guidance set out on 5 November.
“As we approach the completion of our Transformation Plan, Mothercare – one of the leading global brands for parents and young children – once more has a brighter future ahead as a solvent and cash generative group,” said Clive Whiley, chairman of Mothercare.
“We have made good progress with the Transformation Plan and the risks to achieving the outcomes we laid out in November are increasingly dissipated.
“The board changes announced today align the management of Mothercare with that of its new structure as an international franchise brand and will contribute to a further overhead reduction. In time we plan to add relevant skills and expertise – particularly in brand and product management – to the team to accelerate our development as an international brand owner and operator.”
Commenting on the news, Clive Black, analyst at Shore Capital said: “The near-term actions are likely, to our minds, to stall the scope for share price appreciation, but once settled as a debt-free, capital light business, we see the energies of management more productively becoming focused on the day job to deliver value for shareholders through product design and brand management.”