Mothercare losses narrow as turnaround plan takes effect
Mother and baby products retailer Mothercare has trimmed its losses in the first half of its financial year as performance at its UK business improved and international sales continued to grow.
In the 28 weeks to 13 October, Mothercare made a pre-tax loss of £27.4 million after one-off charges compared to a loss of £81.4 million a year earlier. The group’s underlying pre-tax losses, which do not include one-off items, narrowed to £600,000 from a loss of £4.4 million before.
In the UK, the group made an underlying loss of £17 million compared to £18.5 million a year earlier.
While like-for-like sales fell 3.4% in the UK, the decline was smaller than the 7% fall in the same period last year. International like-for-like sales grew by 4.4%.
The group said its transformation and growth plan had progressed well in the period. Under the plan, the group restructured and strengthened its management team, rationalised its UK cost base and continued to grow its international business.
Worldwide network sales were up 2.1% to £636.8 million while total international sales increased by 10.6% to £379.2 million.
Total UK sales were down 8.4% at £257.6 million. Group sales, which reflect UK sales and revenues from Mothercare’s international partners, declined 5.9% to £388.4 million.
The group said its UK store closure programme was on track with 25 Early Learning Centre and six Mothercare stores closed during the first half of the year. At the same time the group launched new store formats which it said were producing "encouraging" results.
Chairman Alan Parker commented: "These are early days and while there is much still to do, I remain confident that we are on track."
Chief executive Simon Calver added: "Our results show early signs of progress despite the challenging trading conditions in the UK and the Eurozone. International profits have grown by 20%, while the like-for-like sales trend in the UK has improved and losses have reduced."
"Ahead of our peak trading period over Christmas, we are working hard to serve our customers better and focusing on the delivery of our plan."
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