Latest News / Mothercare cautions over ‘softening’ UK market as turnaround efforts continue
Mothercare cautions over ‘softening’ UK market as turnaround efforts continue
23 November 2017
Retailer Mothercare has warned over a "softening" UK market and reported widening half-year losses as it pushes on with turnaround efforts.
The baby care chain posted a pre-tax loss of £16.8 million for the 28 weeks to October 7, marking a significantly larger loss than the £800,000 reported a year earlier.
It came as the company worked on the latest "phase" of its turnaround programme, having taken charges on property and restructuring costs.
Total revenues also took a hit, falling 2.4% from £347.7 million to £339.5 million amid tough trading conditions in the Middle East and a transition programme that included store closures across its UK estate.
The company has been working to slim down the total number of UK stores to between 80 to 100 from 143 , having shuttered 10 further locations over the past six months as part of those plans.
Mothercare instead turned attention to sales figures which showed a 2.5% rise in UK sales on a like-for-like basis, yet cautioned over weaker trading on its home turf.
Chief executive Mark Newton-Jones said: "Towards the end of the reporting period, and in subsequent weeks, we have seen a softening in the UK market with lower footfall and spend which is consistent with recent industry reports."
“Not-withstanding this uncertain consumer backdrop, the Mothercare brand, whilst not immune, is in a stronger position with a much-improved product and service offer and a more robust business model.”
Retailers have been concerned over weaker consumer confidence on the back of higher inflation which has surged to 3% on the back of the Brexit-hit pound.
Mr Newton-Jones assured that Mothercare’s transformation plans were “on track”, highlighting a 5.3% rise in online sales, which now account for 42% of its overall UK sales, up from 40% a year earlier.
Shopping via mobiles had also increased, making up 82% of online sales.
“Across the business, we continue to invest and make progress, developing the Mothercare brand into a digitally led, global specialist,” the chief executive said.