Mothercare sales fall amid consumer uncertainty

Mothercare reported wider market uncertainty
Mothercare reported wider market uncertainty
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Retailer Mothercare warned that trading will remain volatile as it reported a fall in UK sales in a "very challenging" environment.

The firm posted an 11 per cent decline in UK like-for-like revenues in the six months to October 6, while total sales in the UK fell 14.3 per cent to £196.2m.

Mothercare said the results reflect "wider market uncertainty and negative brand coverage" following to the group's restructuring programme.

The firm posted a pre-tax loss of £14.4m in the period, a slight narrowing from the £16.8m recorded last year.

Total group revenue, including international, was down 13.1 per cent to £295m.

Chief executive Mark Newton-Jones said: "Our international business is showing signs of recovery after a difficult few years, and some core markets, including Russia, China and Indonesia, have moved into growth.

"The UK retail environment, however, remains very challenging and, given the ongoing uncertainty with consumer confidence, alongside the short-term impacts of our operational changes and restructuring programme, we expect performance in the remainder of our financial year to remain volatile."

In the UK, retail store sales fell 13.8 per cent and online sales dropped 7.8 per cent.

Mothercare said that declining footfall, driven by macroeconomic factors, as well as challenges around supplier restrictions on stock availability had taken their toll.

Earlier this year, Mothercare fired the starting gun on an overhaul which saw it embark on a £32.5m share issue and sweeping store closures.

The babywear chain is shutting 60 of its outlets and said that it was ahead of schedule with the closures.

Mothercare has identified savings of £19m through the store closure process, which will leave it with fewer than 80 UK stores.

It is one of a number of retailers facing financial difficulties, and is closing shops through a controversial insolvency procedure known as a Company Voluntary Arrangement (CVA), which has been used by a string of industry peers.