Mothercare boss Gordon is latest high-profile high street casualty

Shares in the struggling chain leapt nearly 10 per cent after it said its chief executive would leave “by mutual consent”, a week after a profit warning wiped a more than a third off the company’s market value.

Gordon, who had held the top job for nine years, will leave on 17 November, the date of the company’s interim results.

The mothers-to-be, babies and children’s goods retailer, which has seen its share price slide more than 60 per cent since the start of the year, warned last week that its full-year performance will be disappointing.

It said UK sales were “well below” expectations. Domestic like-for-like sales fell 9.6 per cent in the 12 weeks to 1 October and the firm warned that the outlook for the all-important winter trading period had “materially worsened”.

The group, which this year celebrated its 50th anniversary, has been badly hit by a downturn in consumer confidence, although its overseas operations have proved much more successful. It recently announced plans to overhaul its UK retail estate, which will include 110 high-street store closures as the business focuses on out-of-town Parenting Centres, which contain its Early Learning Centre brand. Mothercare has 353 stores in the UK and another 969 overseas.

Gordon led the company’s takeover of the Early Learning Centre and the company’s international expansion.

He said: “I’m very proud of the Mothercare team and what we have built together.

“Mothercare is now one of the world’s leading retail brands and has huge potential going forward. I wish the company all the best for the future.”

He was on an annual salary of £600,000 and picked up a total of £5.2 million in wages and share incentive scheme payments in the year to March 2011. Mothercare’s last annual report said the chief executive was entitled to a 12-month notice and would receive the equivalent salary for the unexpired portion of the period.

The search for a new chief executive has started, Mothercare said.

John Stevenson, an analyst at Peel hunt, said there was no obvious candidate waiting in the wings. He said that although Gordon had been successful in changing the business over his nine-years, Mothercare’s current problems would probably benefit from a “fresh pair of eyes”.

“People have talked about the need to shut down stores but I think there’s more of an issue with the product and the price,” Stevenson said. “It’s about getting the offer right.”

He said Mothercare’s international success depended on the UK operation, so it could not simply abandon the domestic market. But he added that with a clean balance sheet and 97 per cent of pregnant British women still visiting its stores, the company was better placed than many retailers to change its fortunes.