Mamas & Papas bosses warned on tough retail environment
THE bosses of Mamas & Papas warned that margins were coming under pressure due to the challenging UK retail environment ahead of yesterday’s announcement that it is proposing a major restructure.
The Huddersfield-based nursery retailer is hoping to agree a CVA deal with landlords of 60 stores and is placing some staff in a consultation process to “improve the operational efficiency” of the business.
It is understood that the company is looking to shed between 50 and 90 jobs at its head office, where it employs 440, while a further 956 are employed in its shops.
It said the proposals aim to safeguard the future of its UK retail arm in the face of a “persistently tough trading environment.”
In its latest set of accounts filed at Companies House for the year to March 31, 2013, Mamas & Papas (Retail), the company which operates Mamas & Papas’ UK stores, said: “Whilst there has been increasing pressure on gross margin due to the UK retail environment, the business has maintained a firm discipline on administrative overhead with a decrease in costs from the prior period.”
It said the company performed “satisfactorily”, generating turnover of £97.7m, a touch down from £98.3m in the prior year, while gross profit came in at £35.7m compared to £39.7m in 2012.
The loss for the year stood at £2.5m from a loss of £616,000 the year before.
A new store was opened at Trinity Leeds as the business continued to grow its store network by investing £1.4m of capital expenditure in the period.
It decided not to renew the lease on its loss-making Regent Street store, resulting in a £4.2m exceptional income in consideration for surrender of the lease.
The company said that for the year to March 2014, revenue growth is forecast as its newest stores mature and the board continues to “seek to maximise the return generated from the company’s store network.”
