Publications
Publications
- October 2014
- HBS Case Collection
Mothercare, 2014
By: John R. Wells and Galen Danskin
Abstract
In early 2014, Mothercare was the UK's leading retailer of mother-and-baby products. In fiscal 2013, it generated £341 million in revenues from its 255 UK stores and £128 million online, and was more than three times the size of its next biggest competitor, Mama and Papas. It also sold through 1,069 franchised international outlets, which generated 60% of the company's total volume and added £250 million in franchise and other fees to its revenues. Mothercare remained the UK's leading retailer of children's pushchairs, car seats and nursery furniture but it had long lost its leadership position in maternity wear and children's clothes, and its UK operations were losing money. At the beginning of the third year of one of many turnarounds in Mothercare's history, the latest Christmas trading figures looked weak in what had been a highly competitive market, and the company was well behind what many Mothercare executives thought was an unrealistic plan. CEO Simon Calver, less than two years into the job after a widely acclaimed performance as CEO of video rental and streaming business Love Film, pondered on the upcoming January board meeting. The top management team had identified five major initiatives to get the turnaround back on track, but Calver was not convinced this would be enough to restore Mothercare's fortunes. On January 8th, the company issued a profits warning. UK sales were down 4% and international sales, long the source of Mothercare's growth, were disappointing. Investor confidence in the turnaround collapsed, and the share price dropped 31%. The next board meeting was only a week away. Calver reflected on what he would say.
Keywords
Citation
Wells, John R., and Galen Danskin. "Mothercare, 2014." Harvard Business School Case 715-425, October 2014.