MOTHERCARE said it was on a “firmer footing” yesterday after jettisoning loss-making stores and posting better-than-expected sales figures.
The group, which is 12 months into a three-year restructuring plan, overcame snow-bound conditions to report flat UK like-for-like sales in the 11 weeks to March 30, compared with a decline of six per cent in the previous quarter.
It has shut 56 poorly-performing stores in the past year, with the loss of seven per cent of its trading space offset by much stronger internet sales after Mothercare’s Direct in Home operation grew revenues 18.2 per cent in the period.
The company now trades from 255 stores, including 59 Early Learning Centre outlets, under a plan to have a 200-strong estate by 2015. Mothercare’s turnaround plan, overseen by chief executive Simon Calver, also focuses on driving international expansion.
The overseas division opened another 115 stores and increased space by 13.5 per cent in the last year, while sales were up 15.5 per cent in the quarter to the end of March. Mr Calver said there was still much to do but that the group was now on a firmer footing.
He added: “Mothercare has continued to make progress both in the UK and across its international businesses.
“We are just 12 months into our three-year transformation and growth plan and while we still have much to do, our business is already on a firmer footing. Matt Smith joined us as chief financial officer two weeks ago and I am pleased to say that our executive team is now complete.
“So despite our continuing caution with regards to the outlook for consumer spending in the UK and the eurozone, we can look ahead to the new year with confidence,” said Mr Calver.
Shares were up seven per cent after yesterday’s UK sales figure came in ahead of expectations. Matthew McEachran, a retail analyst at N+1 Singer, said: “Given the adverse snow in January and freezing spring conditions, we had feared like-for-like sales would be down 3-4 per cent, so this performance is very reassuring.”
Mothercare’s recent product launches have included its own value clothing range, as well as feeding and pushchair products under the Innosense and Xpedior brands respectively. Its ‘Little Bird’ range, which is backed by TV chef Jamie Oliver’s wife Jools, is being extended this year.
The update is slightly ahead of forecasts but Numis Securities has maintained its forecast for profits in the year to March at £8m, compared with £1.6m a year earlier.