Mothercare in talks to offload UK stores as sales drop

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Mothercare stores
// Mothercare total UK sales drop 23.2% for the 15 weeks to July 13
// Like-for-like sales up 3.2%
// Online sales drop 12.1%
// The retailer is in talks to offload remaining UK stores, according to Sky News

Mothercare has said its extensive store closure programme has affected its total sales in the UK as numbers dropped 23.2 per cent for the 15 weeks to July 13.

Like-for-like sales improved by 3.2 per cent, while online sales dropped 12.1 per cent.

However, the maternity and babywear retailer is now reportedly in talks to sell, franchise or separate its UK store estate, months after striking a CVA deal with creditors that secured its survival.

Sky News reported that Mothercare has started negotiating with ‎third parties about a sale or franchising agreement for its UK stores.

The retailer’s store estate across the country now comprises of 79 stores, down from 134 stores last year.

“The UK retail market remains challenging and though the rate of decline in LFL sales has moderated, margin investment in promotional activity has been necessary to stimulate sales, both in our stores and online,” Mothercare chief executive Mark Newton-Jones said.

“Despite a difficult backdrop, we continue to improve our customer offer and have launched a number of new initiatives including specialist sales and service training to all our store colleagues.

“The process of restructuring and rebuilding a sustainable business continues, and we have in place financing plans to support these actions as we aim to be bank-debt free by the end of the year.”

“Our immediate priority is to complete the transformation of the business with a near-term focus on evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise.”

Last month, Mothercare reduced the size of its board of directors in a bid to overturn its financial losses.

Newton-Jones said the company has added more restructuring experts and the board now has directors who are more hands-on with the company’s restructuring.

Mothercare said it will provide a further update at its interim announcement on November 28.

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