Shares in Mothercare have slumped over 16 per cent after the retailer posted a £16.8million half-year loss and warned of a ‘softening’ UK market.
With a tough UK market, ‘challenging’ trading in the Middle East and a turnaround scheme in full swing, the retailer’s total sales fell by 2.4 per cent.
Across its UK operations, Mothercare’s half-year like-for-like sales rose 2.5 per cent to £229million. Online sales increased by 5.4 per cent.
Slump: Shares in Mothercare have slumped over 15 per cent this morning
Mothercare’s share price is currently down 16.47 per cent to 69.75p.
The company reported an adjusted pre-tax loss of £0.7million, down from a profit of £5.9million in the same period last year.
Mark Newton-Jones, chief executive of Mothercare, 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.’
Over the last six moths, Mothercare closed 10 stores and opened one new one. Across the UK, the retailer has 143 stores, but is keen to trim this number to between 80 and 100.
The group is also in the process of transforming its UK stores so they have a modern ‘club’ look. So far, 97 stores have been modernised, representing three-quarters of its portfolio.
Mothercare is also working on its online presence. In today’s results, the retailer said: ‘Across the business, we continue to invest and make progress, developing the Mothercare brand into a digitally led, global specialist.’
As of 7 October, the group’s pension scheme shortfall stood at £68.9million.
Over the six month period, the company drew down £24.5million from its loan facility.
The retailer said: ‘We remain firmly committed to our vision to be the leading global retailer for parents and young children.’
Along with other high street chains, Mothercare is battling to keep up with online-based retailers and is gearing up for the crucial Black Friday and Christmas sales period.
Many retailers have been concerned over weaker consumer confidence on the back of higher inflation which has surged to 3 per cent.
Store closures: Over the last six moths, Mothercare closed 10 stores and opened one new one