No baby boom as sales in Mothercare drop
Mothercare sales in the UK market dropped last quarter as the trading environment became increasingly promotional.
The British mother and baby products retailer, which operates in 60 countries, said today that sales at British stores fell 0.9pc in the 15 weeks to July 13, its fiscal first quarter.
That compares with a flat like-for-like sales outcome in the fourth quarter of the 2012-13 year and with a very weak outcome in the same quarter last year when like-for-like sales slumped 6.7pc.
"Whilst clothing sales and volumes have benefited from the launch of new ranges, especially the Value Essentials range in July last year, toys and home & travel in particular have been impacted by the increasingly promotional nature of the market," Mothercare said.
The first quarter outcome would have been worse were it not for a 14.6pc rise in online sales.
Led by Chief Executive Simon Calver, Mothercare is in the second year of a three year turnaround plan aimed at revitalising a loss-making UK business worth 40pc of group sales that has lost ground to rising competition from both supermarkets and online players.
The group is improving product ranges and delivery services. British stores are also being revamped and unprofitable ones closed - 56 were closed in 2012-13 and 13 in the first quarter of 2013-14, taking the UK total to 242.
Total UK sales fell 7.9pc.
While Britain's retailers continue to find the going tough at a time when consumers' disposable incomes remain stretched, Mothercare's overseas arm has been more fruitful, with international retail sales up 11.3 percent in constant currency.
The group opened a net 47 stores overseas during the quarter, taking the total to 1,116.
"Trading conditions have been challenging both in the UK and across our Eurozone markets and are expected to remain so for the rest of the year," the firm added.
Mothercare Ireland currently has 19 Mothercare stores and 3 stand alone Early Learning Centre stores.
Shares in Mothercare, which have more than doubled over the last year, closed Wednesday at 473.5p, valuing the business at £420m (€486).