Mothercare pushes ahead with turnaround plans as half-year losses widen

RETAILER MOTHERCARE has warned over a “softening” UK market and reported widening half-year losses as it pushes on with turnaround efforts.

The baby care chain posted a pre-tax loss of £16.8m for the 28 weeks to October 7, marking a significantly larger loss than the £800,000 reported a year earlier.

It came as the company worked on the latest “phase” of its turnaround programme, having taken charges on property and restructuring costs.

Total revenues also took a hit, falling 2.4 per cent from £347.7m to £339.5m amid tough trading conditions in the Middle East and a transition programme that included store closures across its UK estate.

The company has been working to slim down the total number of UK stores to between 80 to 100 from 143, having shuttered 10 further locations over the past six months as part of those plans.

Mothercare instead turned attention to sales figures which showed a 2.5 per cent rise in UK sales on a like-for-like basis, yet cautioned over weaker trading on its home turf.

Chief executive Mark NewtonJones 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.”

Retailers have been concerned over weaker consumer confidence on the back of higher inflation which has surged to 3 per cent on the back of the Brexit-hit pound.

Mr Newton-Jones assured that Mothercare’s transformation plans were “on track”, highlighting a 5.3 per cent rise in online sales, which now account for 42 per cent of its overall UK sales, up from 40 per cent a year earlier.