Mothercare sees plunge in UK sales

MothercareParenting retailer Mothercare has unveiled a plunge in UK sales but was able to cheer investors with good progress in its turnaround plan and online growth.

The group, which also owns the Early Learning Centre, saw like-for-like sales in the UK drop by 6.7% in the 15 weeks to July 14, although analysts said this was in line with expectations.

Mothercare saw shares jump 8% after it said new boss Simon Calver's cost-cutting plan, including a reduction in UK store numbers from 311 to 200 by 2015, was still on track to deliver in the second half of the year.

The babycare firm, which slumped to a £103 million loss in the year to March, said 16 stores had closed in the period and its recently revamped website had seen positive sales growth in the last five weeks.

Meanwhile, its international division, which has offset some of the weakness in the UK, saw sales increase 11% as it opened another 25 stores, taking total overseas outlets to 1,053.

Mothercare's trading update covers a tough period for retailers as record levels of rainfall have hit companies across the sector.

Retail bellwether Marks & Spencer last week reported a 6.8% fall in non-food like-for-like sales in the 13 weeks to June 30 - its worst performance since December 2008.

And official figures revealed mediocre growth of 0.1% across the whole sector as the Queen's Diamond Jubilee was confirmed as having "no significant impact".

Mothercare moved its website to a new platform in May, which initially caused "significant disruption" but soon returned to strong growth.

Matthew Taylor, analyst at Numis, left full-year underlying pre-tax profit forecasts unchanged at £8.1 million, compared to £1.6 million last year.

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