Mothercare Enter Into Administration

Mothercare are set to close every single one of their UK stores after sadly calling in administrators earlier this week.

With the online business also being closed, it is estimated that 2,800 will be losing their jobs.

Only 50 of the UK head office staff will remain in roles, and they will be linked to the running of the international business.


A Crazy Change In Circumstances

Mothercare first opened 58 years ago, but couldn’t withstand the challenging conditions in the current climate in retail.

Within the last 12 years, Mothercare achieved a lot!

In the UK, they purchased the Early Learning Centre toy store, amassed 400 stores… but made the decision to sell the Early Learning Centre in 2019 and now are set to close every single one of those stores.

How on earth does something this bad, happen in such a short amount of time?


What Went Wrong At Mothercare?

Administrators have give an insight into what went wrong.

They stated that Mothercare had been ‘hit hard by increasing cost pressures and changes in consumer spending’.

This shines a light on how much impact the internet has had on the high street.

It has both increased the amount of businesses that are accessible online now, whilst also allowing consumers to make their purchases from the comfort of their own homes.

The businesses that look like they are being hit the most by this shift in consumer mentality are the ones who decided to double down and invest in these 3 areas:

  • Invest heavily in retail space.
  • Buying other competitors.
  • Become as prominent as possible on the high street.

It’s reported that there are options for Mothercare moving forward in the UK. One option that the company are pursuing is to keep their UK presence by selling its products through other retailers stores and websites.


The Risk vs Reward In Doubling Down

It’s worth considering which ‘booming markets’ businesses are being told are ‘must have’ investments in our current climate.

The obvious one is social media growth, and although it doesn’t look like it will disappear soon, businesses should certainly be concerned that the same confidence was felt across the high street 20/30 years ago.

The internet and social media were often laughed off as viable business options when first introduced, however many argue that they haven’t reached their peak point yet.

What areas do you as a business owner tend to bat off as a ‘fad’? 

  • Social Media 
  • Cryptocurrency
  • Influencer Marketing
  • Cloud accounting software

It is well worth looking forward, and deciding which ‘wave’ business owners need to ride before it’s too late.

Sometimes dismissing something as a ‘fad’ leads to devastating consequences, and it’s worth taking the time to think about the long term future of your business.

 

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