24th Feb 2014 07:48
LONDON (Alliance News) - Mothercare PLC Monday said it has started searching for a new chief executive after Simon Calver stood down with immediate effect, a move that comes just over a month since the company issued a profit warning in the wake of tough Christmas trading.
In a statement, the struggling mother and baby product retailer said Calver will "provide transitional support" until the end of March, but the day-to-day operations will be run by executive management, reporting to the company's Chairman.
In January, Mothercare had warned that its results in the year to end-March would be below market expectations after heavy discounting in its sectors over the key Christmas period hit sales and profits.
The company has been struggling in the UK for several years as a result of the economic downturn and due to increased competition from online competitors. It has been restructuring in the UK, closing down unprofitable stores, while also expanding into international markets.
Still, its total UK sales were down 9.9% in the 12 weeks to January 4, while like-for-like sales were down 4%.
Mothercare didn't give any explicit reasoning for Calver's decision.
"Since Simon Calver joined Mothercare in April 2012, under his leadership the company has made progress in implementing the transformation and growth plan. In particular, Simon Calver's e-commerce expertise has allowed Mothercare to accelerate its development as a multi-channel retailer in the UK. We wish him well in the future. Mothercare has a strong executive management team which is very capable of running the business in the interim while the search for a new CEO is under way," Chairman Alan Parker said in a statement.
Mothercare said Monday that it expects its results for the current financial to be in line with market expectations. Those expectations were reduced in the wake of the company's profit warning in January.
"The strategy remains to restore profitability in the UK business to complement the strong and growing International operations," it said in the statement.
Calver has agreed to be paid GBP250,000 in lieu of his six months notice period and GBP44,540 for contractual benefits including pension contributions, the company said. It said he won't get a bonus for the current financial year and the part of his 2013 bonus paid in deferred shares will lapse.
By Steve McGrath; [email protected]; @SteveMcGrath1
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