Mothercare posts first half loss
Mothercare has reported an adjusted pre-tax loss of £0.7 million after experiencing challenging trading conditions in its international markets.
The loss compares to a pre-tax profit of £5.9 million in the corresponding period in the previous year.
The company said its UK transformation is “progressing” with UK like-for-like sales rising by 2.5% in the 28 weeks to 7 October. During the period, Mothercare closed ten underperforming stores and opened one new shop. The company said some 75% of UK stores have now been upgraded to its modern ‘club’ format.
Mark Newton-Jones, chief executive of Mothercare, said: “We are on track with our transformation plans for our business, with like-for-like sales in the UK growing 2.5% and gross margins up by 34 bps year on year, in the first half. Across the business, we continue to invest and make progress, developing the Mothercare brand into a digitally led, global specialist.”
Looking at Mothercare’s international business, like-for-like sales in constant currency were down 8% in the period. Mothercare said its international markets were challenging particularly in the Middle East. In the 28 weeks, the company launched a new website in Pakistan and entered two new marketplaces, including India and the United Arab Emirates. This means it now has a presence in 23 countries.
Commenting on more recent trading, Newton-Jones said: “Towards the end of the reporting period, and in subsequent weeks, we have seen a softening in the UK market with lower footfall and spend which is consistent with recent industry reports. Not-withstanding this uncertain consumer backdrop, the Mothercare brand, whilst not immune, is in a stronger position with a much-improved product and service offer and a more robust business model.”
