business

Mothercare hit with double-digit sales decline – Retail Gazette

// Mothercare suffers major blows in British like-for-likes and total sales for Q3
// Performance attributed to the current store closure system as part of CVA

Mothercare has again had a difficult quarter, with a drop in double-digit sales across the board on its UK market.

The like-for-likes of maternity sellers for the third quarter ended on January 5 fell by 11.4% compared to the previous year, while like-for-likes fell by 11.2% for the year so far.

The total UK sales performed even worse, with a decline of 18.4 percent for the quarter and the year to date.

Mothercare said the results reflected a combination of the difficult consumer background and the aggressive discount activity undertaken in the previous year that increased sales for that period.

Sales were also impacted by the retailer's retail retailer, part of the CVA program, with the UK physical footprint down 18.4 percent during the quarter and for the year to date.

Online sales also fell by 16.3 percent, which according to Mothercare was affected by lower website visits, lower iPad sales in the store due to the store closing program and a smaller toy offer with fewer discounts.

With factoring in all British and international markets, Mothercare recorded a general decline of 18 percent in total group sales.

Nevertheless, the retailer said that it still made "strategic progress" because the CVA program was on schedule.

"Although the United Kingdom continues to be a challenge, partly as a result of our planned restructuring, we are still on track to realize the necessary transformation," said CEO Mark Newton-Jones.

"It is crucial that the group is still disciplined in managing cash and gradually reducing its net bank debt."

Mothercare launched her CVA last year, with plans to scrap jobs and close around 60 stores in the UK.

Newton-Jones said that so far 36 stores are currently switching to close and that the retailer would have lost its stores in 79 stores by the end of March.

"The British business community will now work with a franchise discipline, allowing the wider group to focus on the Mothercare brand and make it stronger globally," he said.

"Looking ahead, our international operations continue to show signs of recovery, although we expect market conditions in the UK to remain challenging with further disruption to our store closing program until April.

"Given the pace of our strategic transformation plan, our profit forecast for the full year remains unchanged."

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