Fashion

Mothercare sales continue to suffer amid challenging UK market


Mothercare sales continue to suffer amid challenging UK market

Mothercare plc, for the 15-week period to July 13, 2019 said, online
sales were impacted by the extensive store closure programme and the loss
of iPad sales in those stores, leading to an overall reduction in on-line
sales of 12.1 percent, while total UK sales were 23.2 percent lower than
last year. International retail sales declined 4.5 percent in constant
currency and 2.1 percent in actual currency.

Commenting on the first quarter update, Mark Newton-Jones, Chief
Executive Officer of Mothercare plc, said in a statement: “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. The impact of this has
negated much of the margin benefits we had expected to
materialise. Furthermore, we have observed a lower than expected transfer
of sales following the CVA store closure programme which completed in early
April 2019.”

Highlights of Mothercare’s Q1 trading

UK LFL sales improved to 3.2 percent, with stronger performance towards
the end of the quarter. The company’s UK store estate now comprises 79
stores down from 134 stores last year. The company witnessed growth in the
key international markets with India reporting 5.5 percent
rise, Indonesia 10.5 percent and Russia 3.4 percent, offset by retail sales
decline in the Middle East of 11.1 percent in constant currency. The
company said, franchise partners continue to invest in the Mothercare
brand, increasing space by 5.6 percent across 1,014 stores.

The company expects the medium-term outlook for the UK market to remain
uncertain and volatile, accompanied by fragile consumer confidence and
against this backdrop and the need for continued promotional activity,
Mothercare said, gross margin improvements in the UK are expected to take
longer to materialise than previously anticipated Accordingly underlying
full-year profitability before tax is forecast to be broadly comparable to
the prior year, inclusive of an estimated negative impact of 2
million pounds of adopting IFRS16.

Picture:Facebook/Mothercare UK



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