Mothercare posts loss following weak UK sales
Babycare retailer Mothercare has posted a pre-tax loss of Â£81.4 million compared to a pre-tax profit of 0.3 million last year. The retailer said the loss illustrated the extent of the challenges facing its UK operations in a weak economic and consumer environment.
Total UK sales fell 4.3% while like-for-like UK sales fell 7% in the six months to 8 October as customers reduced their spending on higher value items.
Group sales rose to £412.9 million from £397.1 million in the previous year.
The poor results in the UK were in sharp contrast with the group’s performance at its overseas stores. Total international sales grew 14.9% to £342.8 million driven mostly by international retail sales which rose by 15.7% to £338.3 million.
In the six month period, Mothercare opened 81 new overseas stores taking the total to 975 in 55 countries. This included the opening of its first stores in Latin America and the signing of a new joint venture in Ukraine.
Mothercare said it was confident about the outlook for the international business which it expects to continue growing sales by 15-20% each year. However, it said its UK trading environment had become “progressively more challenging.”
In light of the results, Mothercare has announced that it is undertaking a a structural and operational review of its planned UK business which will consider the number, format and location of retail outlets and its plan for e-commerce. The review will be carried out during the crucial Christmas trading period and will be completed in the first quarter of next year.
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