 Photo: Mothercare |
Shares in the firm traded over 12 percent higher after Mothercare said its Chief Executive of nine years Ben Gordon would leave the company "by mutual consent" after interim results are published on November 17.
Analysts said Gordon had paid the price for last Wednesday's alert, the retailer's third this year, which revealed UK like-for-like sales slumped 9.6 percent in the 12 weeks to October 1, its fiscal second quarter, offsetting strong growth overseas.
"I'm not too surprised, clearly something's gone wrong in the UK," said Arden Partners analyst Nick Bubb.
"You can't just say forever that 99 percent of babies are born outside of the UK when you're now losing money in the UK."
Last week Bubb slashed his pretax profit forecast for Mothercare's year to end-March 2012 from 29.5 million pounds to break-even. He also expects the dividend to be cut.
Following Gordon's departure the executive management of the company will report directly to the chairman, Alan Parker, while a new CEO is sought.
Analysts said whoever succeeds Gordon faces a tough task in downsizing its 353 UK store estate, while releasing value from the fast-growing overseas business, which currently stands at 969 stores.
Shares in Mothercare were up 15.8 pence at 205.8 pence at 2:19 p.m., valuing the business at about 156 million pounds
By James Davey
(Editing by Neil Maidment and Hans-Juergen Peters)