Mothercare loss knocks ‘textbook recovery’

MOTHERCARE will focus on building its global brand and boosting online business in the UK in the next step of its turnaround plan that has resulted in 55 store closures and the loss of 900 jobs.

The troubled retailer said the next phase of its transformation would include “enhanced” credit options and offering more exclusive products.

The company was forced on Thursday to take the unusual step of delaying the release of its annual results by a day due to the “complexity” of a financial year that saw it post even bigger losses.

The results revealed a pre-tax loss of £87m for the 53 weeks to March 30, up from £72.8m, on revenues down 11.5pc to £514m. Like-for-like UK sales tumbled 8.9pc with both online and instore sales declining, while its international arm also posted a fall.

The company, which wants to be a “textbook recovery case”, said it had completed its UK store closure programme and was now on a “sounder financial footing” after coming through a company voluntary arrangement, a process that allows companies to shut stores and renegotiate rents.

It now has 79 stores in the UK, down from 134 a year ago, and has saved more than its target of £19m.

Net debt, which stood at £44m a year ago, is down to £7m after it sold the Early Learning Centre toy shop business for £13.5m in March and offloaded its Watford head office.

“We have achieved a huge amount, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business,” said Mark Newton-jones, Mothercare’s chief executive. Analysts at finncap said that with the store closures complete “the business needs to start delivering a better sales and margin performance both in store and online in the UK”.

Shares in Mothercare rose 8pc to 22.3p, leaving it valued at £76m.