Stricken retailer Mothercare blamed ‘market uncertainty’ and negative press coverage today for another six months of falling sales.
The baby specialist’s UK sales crashed 14.3 per cent in the last six months – news that sent its languishing shares down a further 8 per cent to just 16p in early trading.
Mothercare warned that its performance will remain ‘volatile’ in its domestic market while it ploughs ahead with store closures.
Mothercare, founded in 1961, now operates 1,268 stores across 48 countries
The retailer embarked on a £32.5million share issue earlier this year and fired the starting gun on 60 store closures as part of an urgent plan to get the firm back on track.
The closures, which it said today are tracking ahead of schedule, will leave it with fewer than 80 UK stores.
Boss Mark Newton-Jones who was re-instated in May and is trying to pick up where he left off
Boss Mark Newton-Jones, who was fired and swiftly re-hired earlier this year, today bemoaned a ‘very challenging’ UK retail environment.
Declining footfall, as well as challenges around ‘supplier restrictions on stock availability’ have taken their toll.
‘Given the ongoing uncertainty with consumer confidence, alongside the short-term impacts of our operational changes and restructuring programme, we expect performance in the remainder of our financial year to remain volatile,’ Newton-Jones said.
Mothercare posted losses of £14.4million for the period, a slight narrowing from the £16.8million recorded last year.
The embattled boss was quick to point out green shoots at its international division, however.
He said this arm is ‘showing signs of recovery after a difficult few years’, with some core markets, including Russia, China and Indonesia, moving into growth.
Total group revenue, including international, was down 13.1 per cent to £295million.
Retail experts did not mince their words in response to today’s update.
‘Poor old Mothercare is still spiralling down in the UK,’ surmised retail analyst Nick Bubb.
And Julie Palmer, partner at Begbies Traynor, said Mothercare has become ‘a byword for trouble on the High Street’.
‘Today’s results highlight some home truths as its financial difficulties show no sign of improving,’ Traynor said.
‘With the rise in competition from retail giants including Tesco, Asda and Sainsbury’s, parents now have multiple options for affordable maternity and baby products.
‘The baby specialist has already axed 200 jobs from its head office, with further plans to close nearly half of its 137 stores as part of its restructuring. The baby may well have to be thrown out with the bath water if these measures don’t work!’