As part of what Mothercare plc (MTC.L) describe as a “Transformation and Growth Strategy”, the company will shut down a further 36 nursery stores and 75 Early Learning Centre (ELC) shops over the next three years.

These newly announced store closures are in addition to the 3 Mothercare stores and 59 ELC shops closed down in the past year. This will reduce the current number of UK branches from 311 to 200 by March 2015; leaving a total of 173 Mothercare and 27 ELC stores. The company believes that the further store closures will add around £13 million to its bottom-line by March 2015.

Jobs are also under threat at the company’s UK head office in Watford, where 98 staff are all ready in consultation – and together with as many as 750 of store employees  - are at risk of redundancy.

Sales in the firm’s UK stores dropped by 6.3% in the past year, however, sales in foreign countries grew by 16%, leaving the group’s total sales up by 0.7% by the end of the forth quarter. The company plans to accelerate its international expansion “… with more store openings in both new and existing countries.”

Alan Parker, Executive Chairman, stated: “Since November, a significant amount of progress has been made across the business. We launched a structural and operational review, appointed a new CEO, closed a significant number of underperforming stores and commenced a consultation programme to streamline our head office function. We have also introduced immediate initiatives aimed at improving value and service for our customers.

“Today we have announced the framework of our decisive three year strategy to restore the UK business back to profit and strengthen our foundations for growth. This will see us operate a lean, more competitive business, focused on the existing profitable stores in a smaller UK portfolio, combined with a state of the art online platform. Our International business continues to perform strongly and we plan to further accelerate growth.

“We now have the cornerstones of our Transformation and Growth strategy in place. Simon Calver joins us later this month and brings with him invaluable business change skills plus e-commerce and international brand expertise. Simon will take whatever action is necessary to deliver the strategy and, as such, will present his detailed plans in May.

“Mothercare is a great global brand with strong international partners. Today marks the beginning of a three-year turnaround and I am confident we will deliver a sustained recovery and long term success.”

Trading update (12 April 2012)

Full year 2011-2012 (52 weeks)

Worldwide network sales up 4.3%
Total group sales up 0.7%
International retail sales up 16.0%
Total UK sales down 6.3%
UK like-for-like sales down 6.2%
Direct in Home sales down 3.4%

Full year statutory trading data based on 53 weeks (vs. 52 last year)

Worldwide network sales up 6.4%
Total group sales up 2.4%
International retail sales up 18.5%
Total UK sales down 4.6%
Direct in Home sales down 1.7%

Fourth quarter (12 weeks)

Worldwide network sales up 4.5%
Total group sales down 4.2%
International retail sales up 18.0%
Total UK sales down 9.5%
UK like-for-like sales down 8.2%
Direct in Home sales down 3.2%

Many have enquired within The Toy Detective Agency about how many Early Learning Centre (ELC) shops have or will be closed-down since it was bought-out by Mothercare in 2007.

Some stores in the following list may be still trading, however, in such cases they are either conducting a closing-down sale or are about to close down.

The Toy Detectives have all ready reported that in May 2011, Mothercare plc (owners of ELC) had announced the closure of 110 stores; including 80 ELC shops. More recently, the Financial Times has reported, that when Mothercare announces its full-year results to the city this May (2012), the company will also announce the closure of a further 66 UK shops. Almost certainly the majority, if not all, of the affected stores will be branches of the toy shop chain; ELC.

Whilst the evidence suggests that there may be very few (or even no) ELC stores by 2017, the brand will still continue as a concession within Mothercare stores and operate a wholesaler to the retail trade. All ready ELC products are sold via independent toy shops, Argos, Amazon, Ocado and the Shop Direct Group of companies (which include Littlewoods, Kays, Great Universal, Woolworths and more); this is in addition to long standing wholesale agreements with Boots and Debenhams

The imminent closure of most of the remaining stand-a-lone ELC shops will certainly be of concern of staff working there, however, it is not the same as an administration or liquidation situation. Where possible, positions in alternative stores will be sought for staff and, if necessary, applicable redundancy payments will be made. Customers can be reasonably assured that any gift vouchers they may have will still be valid in the remaining UK stores operated by Mothercare plc.

The consolidation of both Mothercare and Early Learning Centre brands into single locations has the potential to stabilise the company’s UK decline and gain the greatest possible value for shareholders from its portfolio of UK and Irish stores.

ELC Store Closures in UK & Ireland since Christmas 2007

Andover
Ashford
Aston Under Lyne
Aylesbury
Barrow In Furness
Basingstoke
Bedford
Birmingham (Bull Ring)
Birmingham (The Fort Retail Park)
Bishop’s Stortford
Blackburn
Bolton
Brentwood
Bury
Cambridge (Grafton Centre)
Cambridge (Lion Yard)
Canterbury
Carlisle
Chester
Coventry
Durham
Eastbourne
Gateshead
Gloucester
Halifax
Hanley
Hartlepool
Hastings
High Wycombe
Hitchin
Kidderminster
Kings Lynn
Leamington Spa
Leeds (However, White Rose Shopping Centre branch remains open)
Leicester
Lichfield
Liverpool
Luton
Maidenhead
Manchester (St Anne’s Square)
Manchester (Trafford Centre)
Mansfield
Meadowhall
Newcastle
Newcastle Under Lyme
Newport, Isle Of Wight
Northwich
Nottingham (Ex. Walk)
Nuneaton
Oldham
Oxford
Portsmouth
Reading
St Albans
St Helens
Salisbury
Scarborough
Solihull
Southport
Speke
Stockport
Tamworth
Taunton
Telford
Wakefield
Warrington
Weston Super Mare
Weymouth
Windsor
Woking
Yeovil
Bexleyheath
Bromley
Enfield
Epsom
Harrow
Ilford
Kensington
Kingston
Lewisham
Richmond
Romford
Uxbridge
Watford
Chelsea
Hammersmith
East Kilbride
Edinburgh (Fort Kinnaird Retail Park)
Falkirk
Glasgow (city centre)
Hamilton
Kilmarnock
Kirkcaldy
Newton Mearns
Perth
Ballymena
Belfast
Connswater (Belfast)
Lisburn
Derry
Cardiff
Cwmbran
Llandudno
Newport, Isle Of Wight
Swansea
Cheshire Oaks
Limerick
Tallaght

Please note, any errors in information from ELC catalogues or its website may be replicated here (we’ve weeded out the worst). If you do notice any errors or know of further store closures (or indeed have any other information that you think may be worth publishing) please email: enquiries@thetoydetectives.com

All information will be treated in the strictest confidence.

The company had all ready stated, in May 2011, that it intended to close 110 stores (including around 80 branches of its Early Learning Centre chain of toy shops), leaving 266 high street and out-of-town locations.

However, on 5th October 2011, an admission that trading conditions in the UK would remain challenging after a poor second financial quarter, saw more than a third wiped-off company’s market capitalisation.

This led to the departure of the then CEO Ben Gordon by “mutual consent”, calls for the closing-down of UK operations by analysts, chairman Alan Parker brought-in consultants to undertake a “strategic review” and made the company a likely target of a predatory private equity buy-out.

It’s the strategic review that will see the Mothercare and Early Learning Centre chains to reduced further, to around 200 stores.

Simon Calver, Mothercare’s new CEO, will begin his appointment on 30th April; with Mr. Calver’s experience in technology-led companies, it is expected that Ecommerce will form the nucleus of a revived UK business. Mothercare is all ready advertising new jobs within its Ecommerce division (The Toy Detectives: 18th March 2012).

Shares closed at 178.25 pence, 9.75 pence down on its opening price of 188 pence. The day’s high was 190 pence.

Mothercare

These disappointing UK trading figures follow a poor 2011, which the firm blamed on snow during December.

The fifty-year-old nursery goods and clothing retailer (which also owns toddler toy shop chain Early Learning Centre) continues to fare better aboard. Having opened its 1,000th store overseas, the company reported a 15.0% rise in international sales.

Alan Parker, Executive Chairman of Mothercare, said: “Worldwide network sales increased by 3.0%, as a result of continuing strong growth in our profitable and cash-generative International business. We have opened our 1,000th store outside the UK and also launched in four new countries – Chile, Colombia, Iraq and Morocco.

“In the UK, the better like-for-like sales performance was achieved in an increasingly competitive consumer environment. Additional promotional activity was successful in driving a 5% like-for-like sales increase in December…”

Mothercare may also face a new threat from rival firm Kiddicare (owned by supermarket chain Morrisons), as it eyes-up eleven out-of-town retail “sheds” that have been occupied by electrical goods brand Best Buy.

Group Performance : Third Quarter

• Worldwide network sales up 3.0%
• Total group sales down 1.2%
• International retail sales up 15.0% (up 18.5% at constant exchange rates)
• UK like-for-like sales down 3.0%
• Total UK sales down 6.9% mainly due to planned store closures
• UK Direct in Home sales down 2.2%

Group Performance : Year-to-Date

• Worldwide network sales up 4.5%
• Total group sales up 2.0%
• International retail sales up 15.5%
• UK like-for-like sales down 5.4%
• Total UK sales down 5.3%
• UK Direct in Home sales down 3.4%

In the clearest sign yet that Early Learning Centre has all but given-up on trading on the British high street, The Toy Detectives have become aware that Peterkin UK Ltd are now a wholesaler of the baby and pre-school brand of toys.

All ready this year, ELC toys have become available from Argos, Woolworths and Amazon; and there have been long standing wholesale agreements with Boots and Debenhams. Now independent toy shop owners can take advantage of the many recent and forthcoming closures of ELC stores; and may once again experience a little “Woolies bounce” that was most welcome on 2007 and 2008.

Peterkin, which was established in 1948, supplies toy shop staples such as Dolls World, Motor Zone, Nikko and World Peacekeepers. The inclusion of ELC products currently adds 99 products to its line-up. Items from ELC’s puzzles, music, baby, Happyland and Blossom Farm ranges are included in the selection available to the trade.

Reaction to the news from the toy trade has been rather mixed, British toy shop directory website ToyShopUK.co.uk asked traders if they were considering stocking ELC products, here’s what they had to say.

HALF PRICE SALE

NOW ON

Offer ends: Unknown, however, the best deals sell-out fast.

Early Learning Centre start its Half Price Sale with over two week left before Christmas. An ideal opportunity to find some bargain presents.

The sale offers are available online, in-store and in selected Mothercare stores. There are deals on a wide selection of toys, craft kits, books and even some children’s bicycles.

Highlights include:

• DOLLS SHOP MALL
• 12″ RASCAL BICYCLE
• 12″ GLITTERBUG BICYCLE
• WONDERLAND PALACE
• CITY TRAIN SET
• NEW WOODEN GARAGE
• WOODEN GARAGE
• KIDIZOOM JR PLUS
• ROSEBUD TREEDHOUSE
• Giant Keyboard
• ELECTRIC DRUM KIT
• ZZ ZING PLAYSET
• SIT AND SCOOT
• JCB CHUNKY TRUCKS
• WOODEN FORT
• 85 PIECE RED TUB (PROMO)
• FT RETRO ROBOT

[Caps lock off please, ELC]

Was £45, NOW ONLY

£22.50

Offer ends: Unknown, but don’t expect deals to last long at ELC.

Retailer’s Description

Brambledale play farm has five different buildings, and is the perfect setting for your child to enjoy fun farming adventures. Brambledale Farm is full of inspiring details, such as a winch on the barn and a pond in the farmyard. This realistic wooden farm set includes a slot-together barn, cowshed, chicken coop, stable, sty and pen, plus a farmyard base, which can be set in a square or ‘L’ shape. The clever play farm design means the smaller buildings nest inside the barn so the farm stores away quickly and easily. The barn and stable buildings have plastic feet to hold them together. This wooden farm is great inspiration for classic imaginative play.

Product Specifications

Recommend age: 3 years and older

Assembly requirements: Adult assembly required, slots together – no tools needed
Battery requirements: n/a

Packaged item weight: 2.9 kg
Dimensions:

Manufacturer/Supplier: Early Learning Centre

Manufacturer/Supplier no.: 130257

Was £80, NOW ONLY

£40

Offer ends: Unknown, but don’t expect deals to last long at ELC

Retailer’s Description

The Tower of Doom is a brilliant battle site to fire your child’s imagination. Your child can explore the dungeons, drawbridge and towering turrets, and invent their own exciting stories of knights, monsters and rescues. This brilliantly well-designed toy castle is lavishly detailed and full of fun touches to inspire your child to enjoy rewarding pretend play. The dark Tower of Doom includes a drawbridge, trap door, balconies, dungeon, bridge, turrets, scary details on the walls, and boiling lava flowing by.

Product Specifications

Recommend age: 3 years and older
Assembly requirements: Adult assembly required, slots together – no tools needed
Battery requirements: n/a
Dimensions: height 110 cm, width 67 cm, depth 67 cm
Manufacturer/Supplier: Early Learning Centre
Manufacturer/Supplier no.: 120892

Was £140, NOW ONLY

£70

Offer ends: Unknown, but don’t expect deals to last long at ELC

Retailer’s Description

Your child can enjoy helping their dolls shop in this fantastic large-scale Dolls’ Mansion Department Store. There are three floors in the dolls’ shopping centre and lots to play with, including a toy shop, sweet shop, hair salon, café and clothes boutique with changing room. The dolls’ department store also has an escalator, lift and cash machine. This toy shopping centre is a perfect inspiration for imaginative play and great for playing with friends too.

From the Case Files

This toy is perfect for fashion dolls, such as, Barbie, Moxie, Bratz, Liv and others that are around 12 inches (30 cm) tall. The Dolls’ Mansion Department Store is an ELC packaged version of Kidkraft’s Dolls’ Shopping Center [sic], so expect similar quality. The steps on the escalator do not move. John.

Product Specifications

Recommend age: 3 years and older
Assembly requirements: Adult assembly required, using screwdriver and pliers
Battery requirements: n/a
Dimensions: height 109 cm, width 82 cm, depth 34 cm
Manufacturer/Supplier: Kidkraft / Early Learning Centre
Manufacturer/Supplier no.: 131145

Was £40, NOW ONLY

£20

Offer ends: Unknown, but don’t expect deals to last long at ELC.

Retailer’s Description

Fantastic 2.5m long keyboard with 24 keys and seven different instrument sounds, so your child can step, press and dance to make music. Saves and plays back performances. Comes complete with a volume control and an MP3 player dock.

Product Specifications

Recommend age: 3 years and older
Battery requirements: 4 x AA (not included)
Packaged item weight: 3.46 Kg
Manufacturer/Supplier: Early Learning Centre
Manufacturer/Supplier no.: 130604