Mothercare sees a return to the black

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Mothercare hailed a return to profit today as international sales boomed and a slimmed-down UK operation narrowed losses.

The underlying profit figure of £2m for the 28 weeks to October 12 compared to a loss of £1.8m for the same period last year.

However, restructuring and other costs took their toll on the bottom line, meaning the group was still in the red overall by £11m.

Chief executive Simon Calver said: “The benefits of the changes we are making to the business are clear, with a return to underlying profit.

“Our international business continues to deliver double digit growth and the opportunities in these markets remain.”

Like-for-like sales in the UK were down 1.4 per cent, narrowing from a 3.4 per cent slump in the same period last year while underlying losses of £14.9m were £2m less than the previous corresponding period.

Mr Calver said online sales in the UK were growing and customer surveys showed improved satisfaction rates but consumer spending is likely to remain subdued in the second half of the year.

During the period, Mothercare shut down 18 loss-making stores in the UK and now has 237 outlets in the country -191 Mothercare and 46 Early Learning Centres. This is a fall from 311 over a year and a half.

Mr Calver said larger stores in London’s Oxford Street and Romford have been transformed while a shop in Rotherham has been converted to an outlet store selling the prior season’s stock.

He said a buy-one-get-one-half-price offer to tempt shoppers to buy the autumn/winter range when it was launched at a time of unseasonably warm weather had a negative effect on profits.

Mothercare said its clothes offering had made progress, reflecting current fashion trends and with pricing now at a competitive level.

Market share was growing both on a volume and value basis.

Internationally, total sales rose 13 per cent to £399.3m as the business continued its expansion. Like-for-like sales growth was 4.8 per cent and underlying profit was up 13.5 per cent to £25.2m.

The Mothercare worldwide franchise now trades out of 1,156 stores in 59 countries, with 475 outlets in the largest region, Europe.

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