Mothercare struggled over the Christmas period, reporting a fall in sales.
In the 13 weeks to January 5, the retailer reported an 11.4% fall in in-store sales and 16.3% fall in online sales, blaming lower website traffic and promotions.
“Whilst the UK continues to be challenging, in part as a result of our planned restructuring, we are still on course to deliver the necessary transformation,” said chief executive, Mark Newton-Jones.
“The UK business will now operate with the discipline of a franchise, allowing the wider group to focus on the Mothercare brand and making it stronger globally.”
Mothercare entered a company voluntary arrangement last year, agreeing on plans to close loss-making shops and reduce rents.
Neil Wilson, who is an analyst at markets.com, said: “Yes the transformation programme is underway with cost savings promised. But the sales figures appear very grim indeed, albeit generally, the market has accepted it’s going to be very choppy sailing until land is sighted.”
Analysts are expecting a pre-tax loss of about £13 million for the full year.
Back in November, the group blamed negative press coverage for the fall in sales.
Shares rose 1% in early trading and are currently trading +3.09% at 16,00 (1442GMT).