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Is Mothercare's turnaround working?

Article from: 
Fri, 24/05/2013 - 16:12

Although Mothercare, the retailer specialising in products for expectant mothers, has reported another big loss for this financial year, the company says its turnaround plan is working. While losses for the 12 months to the end of March totalled £21.7m, this was still £3m better than for the same period last year.

Mothercare has embarked on a three-year turnaround plan, led by new Chief Executive Simon Culver. This plan has involved closing loss-making stores, revamping its remaining UK stores and driving online traffic. The group is also trying to boost its profile by adding Costa Coffee concessions and introducing a ‘premium’ range, including a collaboration with Juliette Norton, the wife of celebrity chef Jamie Oliver.

Although sales in the UK dropped by 3.6%, and despite 56 store closures in the UK, it seems that Mothercare’s revamp as part of its turnaround plan is in fact resonating with consumers.

Using YouGov’s brand perception tool, BrandIndex, we can see that Mothercare’s overall Index score (a composite of six key image attributes) has increased by +2.6 points in the previous year.

Furthermore, Mothercare has increased its scores quite dramatically for Buzz and Value. Mothercare’s Buzz score, which measures whether people have heard anything positive or negative about the brand, has increased from -6.2 to +1.1, while its Value score has increased from 0.7 to 4.4.

At a time of financial uncertainty and structural reform, these scores indicate that Mothercare could be following the right strategy to improve its image with consumers.

We have also looked into Mothercare’s performance amongst ABC1 (white collar) females, to see the impact (if any) its ‘premium’ range offering has had. By breaking the data in this way we can see that Mothercare has perhaps performed the strongest amongst this group of consumers; amongst ABC1 women, Mothercare’s Value score has increased from +2.9 to +7 in the last year.

Therefore our consumer perception analysis supports Mothercare’s official stance regarding the future of its business. While losses are being stemmed and the business modernised, Mothercare’s attempts to turn the business around seem to be resonating with consumers overall.

Perhaps most importantly, Mothercare’s strategy seems to be resonating especially well amongst a new target demographic audience. It will be interesting to monitor Mothercare’s performance amongst consumers throughout the next financial year, and to see whether this continues to translate into enhanced financial performance.

Mothercare Buzz
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Mothercare ABC1
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