Mothercare’s finances have taken a dramatic turn as it plunged into loss during its half year, despite a rise in like-for-likes in its UK market.
The global maternity and babycare retailer swung to an adjusted loss before tax of £700,000 in the 28 week period ending October 7, compared to a profit of £5.9 million in the same period the year before.
In addition, Mothercare’s statutory loss before tax deepened to £16.8 million compared with a loss of £800,000 last year.
However, UK like-for-like sales went up 2.5 per cent – boosted by a 5.3 per cent uptick in online like-for-like sales.
The British company said its business transformation plans are progressing, which includes investing in its store layout, supply chain and legacy systems, as well as plans to become a predominantly digitally-led business.
In total, 97 Mothercare stores are now in the modern “club” format as part of the transformation plan, representing 75 per cent of its UK store estate.
However, the retailer’s international performance remained challenging, primarily driven by its Middle East market, with constant currency sales down by 7.7 per cent.
Mothercare chief executive Mark Newton-Jones said plans are in place to reduce its cost base as it becomes “a leaner and simpler” business.
“We have identified opportunities to go faster in this respect,” he said.
Earlier this month, the retailer started a consultation period to make 200 jobs redundant, with the aim of reducing costs from its head office, sourcing, and national distribution centre.