Mothercare’s ‘value’ range gets thumbs-up from customers

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BABY products retailer Mothercare said it trimmed half-year losses yesterday after its new “value” range proved a hit with customers.

The group, which has 280 shops in the UK, saw underlying pre-tax losses fall to £600,000 from £4.4m a year earlier as it returned to sales growth in the second quarter for the first time in two and a half years. Sales of its lower priced clothes were so popular that Mothercare had to order more stock.

Chief executive Simon Calver joined the group earlier this year to lead a turnaround of the loss-making business, which will see store numbers reduced from 311 to 200 by 2015. He said consumer confidence in the UK remained weak ahead of its peak Christmas period and confirmed the group would continue with its store closure and cost-cutting programme.

In the half year to October 13, the group closed 31 shops, including eight Mothercare shops and 25 Early Learning Centres. UK like-for-like sales bounced back in the second quarter with a 0.3 per cent rise, following a 3.4 per cent fall in the first three months.

As well as a good response to its value range, Mothercare has also seen strong demand for its premium offering, including ‘Little Bird’ backed by TV chef Jamie Oliver’s wife Jools, and plans to extend these lines next year. It said its Baby K range by singer Mylene Klass also continued to perform well.

Direct in Home, Mothercare’s web-based home delivery service, increased sales by 0.9 per cent to £43m after a relaunch of the website in May. Its delivery-in-store online service saw sales fall 7.7 per cent to £17.9m, but Mothercare hopes to drive an improvement after introducing next-day delivery.

The group’s international business helped boost Mothercare’s overall performance with a 20 per cent increase in underlying profit to £22.1m. But weaker trading conditions in the eurozone dampened international sales growth, which was 4.4 per cent in the half-year, down from 5.4 per cent.

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