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Mothercare posts first half loss amid difficult trading conditions

Mothercare has reported a first half loss following a “difficult” six month trading period. In the 28 weeks to 8 October, UK like-for-like sales edged down… View Article

GENERAL MERCHANDISE

Mothercare posts first half loss amid difficult trading conditions

Mothercare has reported a first half loss following a “difficult” six month trading period.

In the 28 weeks to 8 October, UK like-for-like sales edged down 0.7% while total sales declined by 2.3% to £231.2 million.

During the period, the UK business made an underlying loss of £8.8 million compared to a loss of £6.1 million in the previous year.

The company said sales and margin growth stalled as a result of unseasonable weather and warehouse changes.

Across the Mothercare group, the company reported a pre-tax loss after exceptional items and non-underlying items of £0.8 million compared to a profit of £5.8 million in the same period last year.

The company said its international performance had been “solid” with a 7.7% total sales uplift despite volatile trading across the globe. On a like-for-like basis sales declined by 2.9%.

Mark Newton-Jones, Mothercare chief executive, said: “We are now in the second year of the turnaround of Mothercare, and we are continuing to make major changes in the business

“The last six months have been challenging and, not withstanding our progress with our strategic pillars, our sales and margin stalled in the period. There are two factors at play here – firstly the widely reported slowdown in sales across the high street due to unseasonal weather through the spring/summer season, resulting in higher markdown.

“Secondly, whilst our planned warehouse infrastructure change has been successfully completed, it did mean a reduced flow of product for eight weeks in the summer and a one-off increase in operational costs as the systems bedded in.”

Mothercare said it competed 32 store refurbishments in the period which now means that around 60% of its store estate is in the new modern format.

Its warehouse infrastructure and systems have also been changed with the first phase completed.

Newton-Jones added: “While conditions in the first half have been challenging, the second half has started in line with our plans and the business is well prepared for the important peak season. We expect to make further progress in the second half which will partially compensate for the effect of the headwinds experienced in H1.

“We continue to see opportunities to further develop and improve our business both here in the UK and in our international markets. Our vision remains clear: to be the leading global retailer for parents and young children.”

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