Sarah Butler 

Mothercare losses deepen as sales continue to slide

Half-year figures show global decline during ‘extraordinarily challenging period’ for retailer
  
  

Shoppers outside a Mothercare store in Wandsworth, London
Mothercare sales fell by 8.4% to £452.3m in the six months to 12 October. Photograph: Linda Nylind/The Guardian

Mothercare’s sales have slid further in Britain and overseas after the retailer put its UK business into administration last month with the potential loss of 2,800 jobs.

Group sales fell by 8.4% to £452.3m in the six months to 12 October, as pre-tax losses widened to £21.2m from £18.5m in the same period a year before.

Mark Newton-Jones, the chief executive of the mother and baby goods retailer, said it had been through an “extraordinarily challenging period”, but Mothercare’s exit from the UK, where it had 79 stores at the time of entering administration, enabled the group to focus on expanding its international operations.

He said the move would complete Mothercare’s transformation “into a capital-light business, which is expected to be both cash generative and profitable”.

Newton-Jones added: “We are confident in the future of the Mothercare brand. We believe that, without the financial and management burden of running a UK retail operation, we can singularly focus Mothercare on its global international franchise.”

However, the half-year figures showed a 5.7% slide in sales at Mothercare’s established overseas stores, while pre-tax profits dropped by 21% to £12.2m. The retailer closed a net 45 overseas stores, taking the total to 965.

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Mothercare said trading had been difficult in the Middle East and China, but growth was strong in its key markets of India, Indonesia and Russia.

The company said it was also in discussions about establishing a franchise deal for Mothercare in the UK and would make an announcement in due course.

Last year, the retailer said it had been forced to flag “material uncertainty” that the group would remain a going concern because of the possibility of a more significant and prolonged decline in trading. But Mothercare said it now believed it had sufficient cash to meet all its contractual financial commitments for the year.

 

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