Mothercare reduces UK losses as LFLs fall


Parent & child products retailer Mothercare saw UK like-for-like sales fall 3.6 per cent in its full year though reduced its UK losses by 12.1 per cent to £21.7 million, figures released today reveal.

In the 52 weeks to March 30th 2013, total UK sales plunged 10.8 per cent to £499.7 million as Mothercare closed 56 of its loss-making stores in the country, taking its total to 255.

Nonetheless, Mothercare CEO Simon Calver said that customers are responding well to its ongoing Transformation and Growth plan both in the domestic market and overseas.

Last May, Mothercare unveiled a turnaround strategy after reported losses of £03 million in its full year, breaking this down into four primary objectives: cutting business costs, improving customer service and developing its multichannel offer while streamlining its bricks & mortar portfolio.

“Our results reflect the progress we have made against our plans to reduce UK losses and deliver continued International profit growth,” Calver said.

“After the first year of our Transformation and Growth plan, the Company is on a firmer footing.

“I look forward to building on this in the years ahead, as the world‘s leading multichannel mother and baby specialist.”

International profit leapt 20.3 per cent to £42 million over the year while total international sales rose 8.4 per cent and LFLs increased 5.6 per cent on the same period last year.

Meanwhile, its online proposition also fared well with Direct at Home sales up four per cent thanks to improvement to its website and the launch of a new mobile app.

Such developments have helped the retailer progress in a tough economic environment though analysts warn that there is more work to be done.

Liz Faulkner, Consultant at analyst firm Conlumino, said: “While the first year of its transformation has seen to clear steps in the right direction, the retailer faces significant challenges if it is make the proposition relevant again in a highly competitive market.

“At the value end of the spectrum, the grocers continue to benefit from a clear price advantage which, allied to their large footprints, make them persistently compelling alternatives.

“Elsewhere, John Lewis – via the growth of its At Home format – represents a growing threat at the premium end.”

Mothercare Chairman Alan Parker believes the year has been a success and is confident of its strategy for future growth.

“It has been a busy and successful year in the transformation of Mothercare plc,” he said.

“The Group‘s profitability has improved, in line with our plans, and we have delivered the first phase of our Transformation and Growth plan.

“This has been achieved against a backdrop of considerable change within the organisation and subdued consumer spending.

“Our strong franchise relationships around the globe give us solid foundations for continued growth both in terms of sales and profits internationally.

“I look forward to the year ahead, confident that the group is moving in the right direction.”