Mothercare makes progress as UK performance improves
Mothercare has reduced its losses and increased its like-for-like sales by 1.5% in the UK in the 28 weeks to 11 October as the mother and baby products retailer made progress with its turnaround.
The retailer’s UK underlying losses amounted to £13.5 million in the period compared to £14.9 million last year. However, total UK sales dropped by 1.2% to £235.6 million as Mothercare continued to close loss making stores.
Mothercare chief executive Mark Newton-Jones said: “With the support of our shareholders we have successfully completed the rights issue, which now gives us the financial resources and flexibility to implement our strategy. Whilst it is still early days the results, this morning, show some improvement.
“In the UK, we have made progress towards re-establishing ourselves as a full price retailer. For this approach to be sustainable, we must continue to improve our style, quality, design and innovation in product while modernising our presentation both online and in store. Our international partners continue to see growth opportunities and are encouraged by our plans to modernise the UK business.”
International like-for-like sales climbed by 4.9%, while total international sales edged down 0.5% to £397.5 million. Underlying international profits remained largely unchanged at £25.3 million as a result of anticipated currency headwinds.
Worldwide sales fell 0.7% to £633.1 million while underlying pre-tax profit rose by 65% to £3.3 million. Reported profit before tax was £5.5 million compared to a loss of £11 million last year, as a result of lower exceptional items and a credit from ‘marking to market’ foreign currency contracts.
During the period, the retailer continued to implement its strategic plan as it looks to become a digitally led business supported by a modern retail estate. International space grew by 12.9% with 79 new stores opened since the beginning of the year. Mothercare also continued to reshape its UK business with the planned closure of 14 loss-making stores and the refit of two existing stores.
The retailer now operates 1,300 stores in 60 countries.
In the UK, online sales grew by 14.1% and now represent 27% of total UK sales compared to 23% last year. The retailer said mobile is continuing to grow rapidly and now accounts for 71% of UK online sessions compared to 59% last year. In addition, click and collect now makes up 35% of all online orders, having grown from 32% last year.
Looking ahead Newton-Jones added: “Trading conditions remain challenging, but we are making progress building the foundations for the future of the business both in the UK and across our International territories. Our vision is clear, to be the leading global retailer for parents and young children.”
