Mothercare: From favourite to failure

What happened to Mothercare?

Update 5 November 2019

BBC News online reports All Mothercare UK stores to close:

“Troubled baby goods retailer Mothercare has called in administrators, putting 2,500 UK jobs at risk.

There will be a phased closure of all of its 79 UK stores, administrators from PwC said.

The UK firm “has been loss making for a number of years”, but international franchises are profitable, PwC said.

On Monday the baby goods firm said it was “not capable” of being sufficiently profitable and that it had failed to find a buyer.

Joint administrator Zelf Hussain said: “This is a sad moment for a well-known High Street name,” adding that Mothercare “has been hit hard by increasing cost pressures and changes in consumer spending.”

“It’s with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible,” Mr Hussain said.”

Mothercare calls in the administrators

Mothercare announced today (4 November 2019) that it plans to bring in the administrators, putting 2,500 jobs at risk. So what happened?

BBC News back in May 2018 reported that Mothercare was finalising a rescue deal with its creditors after years of falling sales and profits. Mothercare: What’s gone wrong at the struggling retailer? It had already gone through a company voluntary arrangement (CVA), which allowed it to shut 55 shops.

Outside Mothercare store

Competition

Mothercare was once the place to go for parents-to-be. It was perhaps the only place to go when it was founded in 1961. Parents-to-be and new parents, friends and family wanting to make a gift to the new arrival, all went to Mothercare for the baby’s needs.

However in the last ten to twenty years or so Mothercare has not kept up with its competitors. It rested on its laurels, believing that it could go on as it always had being the market leader in baby goods. But it couldn’t.
Next, H & M, Primark, Matalan, supermarkets all started to compete in the same marketplace bringing both convenience and competitive prices. It almost goes without saying that Amazon has certainly played its part in Mothercare’s demise with the huge range of baby products and speedy delivery that it offers.

Even ten years ago online shopping sites for baby equipment were already doing great business and were at all the baby shows pushing their wares. I remember when I was pregnant 12 years ago and did my research on which came out best. The pushchair, the car seat, the cot all came from new online shopping sites and not Mothercare, simply on price for the same items and Mothercare did not offer any added value.

Whilst other stores increased their offerings, Mothercare did little to move with the times. It didn’t change its pricing structures and didn’t invest much in online services.

Mothercare expansion

At Tesco, the company expanded and profits fell before a new CEO drew in the reins and sold off parts of the business. In similar fashion Mothercare increased the number of shops and has been reducing outlets in the last few years but without the same impact on the company’s bottom line.
The company had already shut 58 stores out of 137 only last year. While Mothercase’s remaining network of 79 UK stores has been hit by this shock news of administration, overseas activities remain profitable and more than 1000 stores will continue to operate. [ref: http://www.mothercareplc.com/who-we-are/global-presence.aspx ]

Customer experience

In the past Mothercare was not only best on its range and price. It was also known for the expertise offered by its friendly and knowledgeable staff, many of whom had been with the company for years, as experienced mothers and grandmothers.

However, Mothercare stopped being the place where people went for advice some years ago. It could have been a unique selling point that online stores cannot offer, but was no longer seen as the place to find an “expert” to help with a baby question.

What customers say about Mothercare and why it is important

I asked people on my The Complaining Cow Facebook page what they thought of Mothercare’s demise. Analysts don’t seem to ever ask consumers questions about why a store is in decline and yet it is the consumers who stopped shopping there. Isn’t it obvious that that’s where the answers lie?

They told me quite clearly that price was a big factor and that it had ignored competition and had not kept up with the times. It should be offering advice and support and customer service that you can’t get online and, by doing that, build up loyalty. Consumers said that the company’s own brand items did not live up to the price being charged. They became old fashioned and seemed to be busy and understaffed, so ordering online is more simple and quicker. Mothercare’s own online systems had a variety of issues which put off prospective customers.

The name

It is the 21st century. Mothercare missed a trick. As well as not keeping up with the times in stock, prices and delivery the actual name is outdated. It isn’t just mothers shopping for families anymore! Imagine the publicity if they changed the name to cover to something like Parentcare or Familycare.

Executive greed

And, of course, not looking after price and customer service are not the only factors. The other is common to many other company failures: Greedy and ineffective executives.

The Evening Standard reported on executive appointments and pay at the company in its May 2018 article Mothercare to pay for two top salaries as boss Mark Newton-Jones rejoins. It said:

“Mark Newton-Jones, who was ousted by its then chairman Alan Parker last month, is now back, on a £480,000 salary a year. This is the same as he was due to be paid, but down on the £612,000 he earned last year.

David Woods, brought in to succeed him, will now be managing director, earning £430,000 a year. Parker has since left the business.”

That’s two very expensive bosses!

It seems odd that Mothercare should bring someone back who was not part of Mothercare’s success and also keep David Woods. Why? Neither of them have secured any growth. In fact they have been part of Mothercare’s decline, as the company continued to be overtaken by competitors and did not keep up with changing times.

Mothercare needs to Listen and Learn

Perhaps, just for once, a chain could listen to its customers and learn what they want. Update its name, service and whole model. In the meantime it seems there is unfortunately no clear future for this former family favourite.

From Three to Zero – the network that’s a notwork

One, Two, Three, Down

Three mobile provider the situation

3 logo

The mobile network Three has gone down today (17/10/19). At the point of writing the company doesn’t seem to know what the problem is or when it will be fixed.

It seems to have been slow to inform people too, perhaps taking advantage of there being fewer people active late at night and into the early hours of the morning. However, this tactic backfired, as when the company eventually put up this message, it was more than 8 hours after people were first reporting problems:

 

Down Detector which measures the number of reports of an outage on social media, and shows more than 2100 reports by 10.00am today.

Three has not said how many of its 10 million customers have been affected by the outage.

Update from Three at 1.20pm

A Three spokesperson said: “Following technical difficulties with our services across voice, text and data, some customers will be experiencing an intermittent service.

Our engineers are working to fix the issue and the service is returning to normal, and we expect it to be resolved over the course of the day.

We advise our customers to turn their phones off and on or turn airplane mode on and off, which may resolve the issue.

We are sorry for the inconvenience caused to our customers.”

Your consumer rights if you are affected by Three’s downtime

Under the Consumer Rights Act 2015 you are entitled to services to be carried out with reasonable skill and care. You are entitled to a full refund of the cost of the time you are without use of your phone. You are also entitled to redress for any out-of-pocket expenses you incurred due to not being able to use anything on your phone. For example, if you incurred bank charges because you couldn’t transfer money or had to use a payphone. You can claim for consequential losses due to Three’s breach of contract.

Once the system is back up and running, calculate your losses. Write do not phone the company so you have a record of evidence. Outline the problems you had and any costs you incurred and provide evidence for this. State what you want as redress and mention that it is because of a breach of the Consumer Rights Act 2015, as outlined above.

Get in quickly, as a huge queue of complaints will soon grow.

You can also jump the queue of complaints and complain directly to the CEO. Go to ceoemail.com for contact details. The CEO won’t respond personally but the matter does get escalated and dealt with by a different team to customer services.

If you are still not satisfied with the response you can take the matter to Ombudsman Services: Communications.

Your rights if affected by the outage – what Ofcom says

Ofcom states:

“Although no-one can guarantee an entirely fault free service, your provider should be working hard to maintain the level of service they promised.

In more extreme cases, where repairs take much longer (for example it takes longer than usual to access a mast site to undertake repairs), you may be entitled to an additional refund or account credit.

In cases where you have been without service for some time, you may also have the right to leave the contract without penalty. There may be a term in your contract saying you can do this if your provider has failed in its obligations to you or breached a key condition.”

More help with telecom issues

All you need to know about complaining to telecom providers for more information and posts about your rights and telecoms.

Cover of How to Complain updated 2019 large cow logo

 

For lots of information, advice, tips, consumer laws and template letter GET THE BOOK! How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!

Future for Three

In reality few people will be much out of pocket but it is the lack of information that has frustrated customers.

“Three customers on Twitter are saying that they have been pleased with the company’s service for years and can forgive them for this downtime. But they are unimpressed with the speed with which it acknowledged the problem and the lack of clarity about the issue and when it will be fixed. Three really needs to improve its customer service and communications if it doesn’t want to lose customers over this.

O2 network failures – your consumer rights