Mothercare has parted company with its chief executive six weeks after issuing a dramatic profit warning. The mothers-to-be and babies store said Simon Calver had resigned as chief executive with immediate effect and would be leaving the company at the end of March.
Calver, who served less than two years in the top job, takes away a pounds 250,000 payoff in lieu of six months' notice, plus pounds 44,540 in forgone pension contributions.
The former management consultant and branding expert was poached by Mothercare from the LoveFilm DVD and games rental company in 2012 to lead its turnaround effort, after years of falling sales.
His predecessor as chief executive, Ben Gordon, stood down "by mutual consent" after a profit warning, at the instigation of Mothercare's chairman, Alan Parker. But the retailer has continued to struggle, despite closing scores of unprofitable stores and expanding its online presence. Last month Mothercare admitted it had had a poor Christmas, with heavy discounting and weak toy sales eating into profits.
The store's broker slashed its profit expectations by more than half to pounds 8m, causing the share price to tumble.
The weakness of the UK business has left the group reliant on Mothercare's 1,070 international stores to stay in profit. The company has about 230 stores under the Mothercare and Early Learning Centre brands in the UK.
But they made a loss of pounds 21.7m in the most recent financial year, making it another middle-market casualty struggling to compete with cheaper baby clothes in supermarkets and more upmarket offerings from department stores. In a statement yesterday Mothercare said it was confident its financial results would be in line with market forecasts and vowed to continue efforts to restore profitability.
It did not give a reason for Calver's departure, but it is understood the board had doubts about his retail skills and abilities to nurse Mothercare back to profitability in its home market.
Parker said the store had made progress on its turnaround plan since Calver joined in April 2012. "In particular, Simon Calver's e-commerce expertise has allowed Mothercare to accelerate its development as a multichannel retailer in the UK," he said.
Carly Syme, a senior analyst at Verdict, said Mothercare needed a chief executive with retail experience. "They should not just rely on this person coming in and thinking they know about online, so it is all going to be OK. They have got to have broad knowledge of how stores work." She urged the retailer to look at where it was situated in the market. "It may need more value ranges to compete with the grocers and more premium products that it could charge a bit extra for."
Branding expert Simon Calver (right) had been poached from LoveFilm after years of falling sales at Mothercare
Myleene Klass has a range of baby clothes at Mothercare called the Baby K Collection Photograph: Beretta/Sims/Rex