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Mothercare Puts 'for Sale' Sign On 121 Uk Stores

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Mothercare has sent out a list of 121 UK outlets that could be up for grabs as it ploughs on with its strategy of closing shops. The childrenswear retailer has already announced that it is to bring down the shutters on 30 shops this year but the new list could lead to many more being sold.

Working with property agent CB Richard Ellis, it began circulating the confidential list among other retailers last week. It contains the details of 32 loss-making shops that are a priority to close, and a longer list of shops to sell if the right price is offered. The list also includes Early Learning stores – the chain Mothercare bought in 2007.

Mothercare, which has 377 British shops, announced in November 2009 that it would close 30 a year over three years as it moves from its smaller, high-street shops to out-of-town locations. The idea is that customers can drive to the these larger shops, known as "parenting centres", and park easily. Fourteen have opened so far this financial year.

Mothercare, with a market capitalisation of £369m, is due to give an update on its property strategy at its full-year results on 18 May. It has issued two profit warnings this year. In March it said UK sales remained in the red and revealed that profit margins were taking a bigger-than-expected hit.

Nick Bubb, an analyst at Arden Partners, said: "The issue is that the collapse in UK profits is completely undermining the growth overseas. The UK-overseas imbalance issue is a mess and management are under pressure to sort it out."

Mothercare would not comment on the 121-store list, but its chief executive, Ben Gordon, said last month in a trading update: "The UK is an unsure and slightly nervous environment, but international is booming."

Trading overseas in India, China and the Middle East has proved successful, and there are 894 stores outside Britain – with 263 in the Middle East and 242 in the Asia-Pacific region. Shares have fallen sharply since January from 600p, closing on Friday at 417p a share.

Mike Logue, a former Asda director, is on the verge of joining as UK director for Mothercare and Early Learning Centre, leaving Mr Gordon free to concentrate on overseas.

The British retail landscape is still tough for established chains, and changing consumer habits have caused many to rethink their property strategies.

Electrical retailer Dixons has reduced its store portfolio by opening two-in-one store concepts and Currys megastores.

Furniture retailer DFS, advised by property agent Harvey Spack Field, is in talks to buy six stores from Dixons to fuel its expansion. DFS is gradually growing following its purchase by Advent International in April.

Britain is becoming more difficult for retailers affected by online and supermarket sales, such as music, games and electricals. But the distress of some retailers leads to opportunities for other – successful and acquisitive – retailers.

The administration of DIY retailer Focus on Wednesday will be an opportunity for its rivals to snap up stores from the administrator. B&Q parent Kingfisher has taken 31 shops, and The Range, Wickes and Dunelm will also look at batches of stores. The 181-store portfolio has around 20 shops with food planning consent, which will mean some supermarket chains will also take a look.

High streets everywhere are dying. Even in the supposedly bountiful Aberdeen here were I stay.

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Retail is in a slow decline and it spells danger for chains who have taken over by driving rents higher over the last 10 years (which has been in their interests because it makes it very difficult for independent retailers to compete).

In future there will be a massive over-supply of retail premises which will of course will put extreme downward pressure on rents.

IMO we are getting near the tipping point where rents will fall off a cliff which will lead to opportunities for others.

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Retail is in a slow decline and it spells danger for chains who have taken over by driving rents higher over the last 10 years (which has been in their interests because it makes it very difficult for independent retailers to compete).

In future there will be a massive over-supply of retail premises which will of course will put extreme downward pressure on rents.

IMO we are getting near the tipping point where rents will fall off a cliff which will lead to opportunities for others.

Yes, but retail depends on disposable income and personal credit. There has been a massive decline in the personal credit and equity withdrawal, and nobody anywhere has put forth a valid arguement as to how we can re-inflate the post 2007 bubble.

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Could retail survive with blower high street rents?

I don't know. Outside of clothing, and maybe the odd gizmo, people are quite happy to shop online and wait a few days for the parcel to arrive, or people get in their cars and drive off to the big box stores of Tesco/Asda and buy things on the cheap.

Doesn't bode well for high street shops at all.

Besides, the high street of our new millennium is nothing more than a carbon copy of every body else's. I feel no sorrow when franchise x or y go tits up.

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I don't know. Outside of clothing, and maybe the odd gizmo

The only purchases I've made in town recently were shoes.

I might given online shoe buying a go though.

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Could retail survive with blower high street rents?

...depends if they grew faster than they should have done built with debt. ;)

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Retail is in a slow decline and it spells danger for chains who have taken over by driving rents higher over the last 10 years (which has been in their interests because it makes it very difficult for independent retailers to compete).

In future there will be a massive over-supply of retail premises which will of course will put extreme downward pressure on rents.

IMO we are getting near the tipping point where rents will fall off a cliff which will lead to opportunities for others.

Yep, I think if that happens, you'll see loads of little niche shops opening up. Take a place like Sherborne (not too far from me)...I believe it has the lowest percentage of empty shops in the south-west...the locals virtually picketed the local council, when they allowed Costa Coffee to open up a shop...

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Yep, I think if that happens, you'll see loads of little niche shops opening up. Take a place like Sherborne (not too far from me)...I believe it has the lowest percentage of empty shops in the south-west...the locals virtually picketed the local council, when they allowed Costa Coffee to open up a shop...

No you won't - niche shops, farmers markets, organic grocers etc etc are all taking a hit and losing customers to the big supermarkets etc. Even if rents collapse they cannot make money because with ripoff fuel and parking costs, folks soon abandon their moral principles and shop online with cheap or free delivery.

It is happening up here in North Norfolk, the quaint high streets with lots of niche shops are losing them.

What is and will happen is that landlords and developers will apply for planning approvals to convert the shops to residential use, and we will see them being rented or sold to low income and immigrant people. One town near me called Sheringham has heaps of former shops in side roads which are now holiday cottages (but due to conservation rules have kept their victorian shopfronts but slung some net curtains across etc to try to disguise them). The future is NO high street shops of any description at all - everything will be online and out of town, including banks, estate agents etc etc. Give it 10-20 years and high streets as we know them will be thought of as one now thinks of, say, vinyl records.

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Speclist shops like mothercare simply can't compete in the current market where everything they sell is now available from you local out-of-town supermarket.

If you haven't noticed, pretty much all specialist shops are going down.

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Speclist shops like mothercare simply can't compete in the current market where everything they sell is now available from you local out-of-town supermarket.

If you haven't noticed, pretty much all specialist shops are going down.

....the sad thing about it is the specialist shops give a better service and often a better price than the big stores....people nolonger think of them anymore they would rather shop in a large impersonal diy store or supermarket.....if they are not used they will be lost forever in many places...but not all. ;)

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No you won't - niche shops, farmers markets, organic grocers etc etc are all taking a hit and losing customers to the big supermarkets etc. Even if rents collapse they cannot make money because with ripoff fuel and parking costs, folks soon abandon their moral principles and shop online with cheap or free delivery.

It is happening up here in North Norfolk, the quaint high streets with lots of niche shops are losing them.

What is and will happen is that landlords and developers will apply for planning approvals to convert the shops to residential use, and we will see them being rented or sold to low income and immigrant people. One town near me called Sheringham has heaps of former shops in side roads which are now holiday cottages (but due to conservation rules have kept their victorian shopfronts but slung some net curtains across etc to try to disguise them). The future is NO high street shops of any description at all - everything will be online and out of town, including banks, estate agents etc etc. Give it 10-20 years and high streets as we know them will be thought of as one now thinks of, say, vinyl records.

Here in the southwest (well towns near me)...niche shops run by local people are taking over those that were either franchises or the big chains...it depends on the state of the local economy...the trouble with Norfolk (and other coastal / near coastal areas) is that you purposely have to go there, rather than it being being able to grab passing trade whilst people are travelling through. A while ago, I vaguely remember reading about the issues King's Lynn were having.... Admittedly it will be interesting to see what effect the localism bill will have on shops, whereby the owner will no longer need planning permission to convert the shop into a dwelling...

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Retail is in a slow decline and it spells danger for chains who have taken over by driving rents higher over the last 10 years (which has been in their interests because it makes it very difficult for independent retailers to compete).

That's an interesting point that never occurred to me before. Most large retail chains own substantial retail freeholds, those they don't use for their own operations they rent to others. So increasing rents has no great affect on them, the higher rents they pay are balanced out by the higher rents they receive.

The result is that retailers without their own property portfolio are squeezed.

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That's an interesting point that never occurred to me before. Most large retail chains own substantial retail freeholds, those they don't use for their own operations they rent to others. So increasing rents has no great affect on them, the higher rents they pay are balanced out by the higher rents they receive.

The result is that retailers without their own property portfolio are squeezed.

Virtually no decent pitches are available freehold.

Any directors of PLCs not doing sale and leaseback deals on property would have been under big pressure from investors - it would also make you vulnerable to hostile takeover to retain them.

Supermarket chains generally have the highest percentage of freeholds but even Tesco has been forced to do sale and leasebacks recently - even originating loans from its own bank to lend to the purchaser.

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Mothercare is ludicrously expensive, £12 for a T--shirt that the little 'un will outgrow in a month, folk just haven't got the money for that any more.

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Mothercare is ludicrously expensive, £12 for a T--shirt that the little 'un will outgrow in a month, folk just haven't got the money for that any more.

If you go to a car boot, there are literally dozens of stalls selling second hand clothes...You don't really need to buy new, especially at the inflated prices that Mothercare charge..

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Here in the southwest (well towns near me)...niche shops run by local people are taking over those that were either franchises or the big chains...it depends on the state of the local economy...the trouble with Norfolk (and other coastal / near coastal areas) is that you purposely have to go there, rather than it being being able to grab passing trade whilst people are travelling through. A while ago, I vaguely remember reading about the issues King's Lynn were having.... Admittedly it will be interesting to see what effect the localism bill will have on shops, whereby the owner will no longer need planning permission to convert the shop into a dwelling...

Some independent coffee shops etc. will do OK with the right pitch.

Doesn't matter what rents are (and I've got plenty of shops I pay no rent on but are still borderline viable) the High St isn't coming back regardless of rents.

There's nothing much left of the wholesale distributor sector and all the factories are in China - and they only sell by the container load.

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Mothercare is ludicrously expensive, £12 for a T--shirt that the little 'un will outgrow in a month, folk just haven't got the money for that any more.

They have in other countries though - and Mothercare's doing well there.

Selling the Chinese their own tat back to them is only going to last so long though.

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Some independent coffee shops etc. will do OK with the right pitch.

Doesn't matter what rents are (and I've got plenty of shops I pay no rent on but are still borderline viable) the High St isn't coming back regardless of rents.

There's nothing much left of the wholesale distributor sector and all the factories are in China - and they only sell by the container load.

The trouble with importing from China, is that you can't always guarantee the quality of the manufacture.

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The trouble with importing from China, is that you can't always guarantee the quality of the manufacture.

Yes. I remember British manufacturing quality was absolutely guaranteed, eg British Leyland Cars. They were guaranteed to be of consistent quality. *

* shite. I recall my parents only brand new motor, a 1972 Marina, needing new sills welded on before its first MOT. Plus a new clutch, alternator, exhaust. Real low mileage too, only used for the school run.

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The trouble with importing from China, is that you can't always guarantee the quality of the manufacture.

It's mostly the same tooling relocated from this, and other Western countries, to China.

It's something I might have worried about 15 years ago.

In the early days I've put truckloads of stuff made in China in landfill and reordered and still been up on sourcing domestically.

People wobble on about 'I won't buy Chinese made tat' but, the fundamental thing to bear in mind with all customer feedback is that most people are full oh sh1t.

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It's mostly the same tooling relocated from this, and other Western countries, to China.

It's something I might have worried about 15 years ago.

In the early days I've put truckloads of stuff made in China in landfill and reordered and still been up on sourcing domestically.

People wobble on about 'I won't buy Chinese made tat' but, the fundamental thing to bear in mind with all customer feedback is that most people are full oh sh1t.

I'm talking from personal experience...Company I work for, have imported batches of A/V goods (manufactured to our specifications) directly from China...the failure rate is often around 8 to 10%...I know, I've had to test whole batches before....

One method that we might use in the future is to use an agent in Europe, they ship it in for us, and they are liable for any poorly manufactured goods...however, the customer then grumbles, because you've had to put the price up by 10%..

A lot of Chinese companies stamp their products with CE, but blatantly aren't...I've also noticed "tested" stickers on items, but the unit was built incomplete...

Edited by Dave Beans

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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