Mothercare hails first underlying United Kingdom profit in six years

Xavier Trudeau
Mai 19, 2017

The baby care chain said it would slash its 152-strong United Kingdom store estate further to between 80 and 100 shops as it moves to the "second phase" of an overhaul.

The group enjoyed a 1.1 per cent increase in like-for-like United Kingdom sales in the 52 weeks to 25 March 2017, although total sales fell slightly to £459.4m for the year.

Mothercare has been contacted for clarification over the future of the county's Chelmsford, Basildon and Clacton stores. Furthermore, more than 40 per cent of the company's United Kingdom sales are now online, with a database of more than three million customers.

"We are now in the third year of our turnaround and I am pleased to report that we have achieved much of what we set out to do from our six pillar strategy introduced in 2014", said chief executive Mark Newton-Jones.

"Digital revenue is on a trajectory to be over half of our turnover", Newton-Jones said, adding that store numbers will reduce over time as Mothercare focuses on a regional presence in "key conurbations across the UK". As a result, underlying United Kingdom losses for the whole year narrowed to £4.4m from £6.4m a year earlier.

Across the full-year, group sales slipped 2.2% to £667.4 million, but underlying pre-tax profits edged up 1% to £19.7 million.

Mothercare cautioned there would be job losses as it shuts shops over the next five years, with cuts expected across the store workforce and head office under aims to become "leaner".

It has already slashed a significant portion of its estate, closing the shutters on 21 stores in the year to March 25, and over 100 since it began its overhaul three years ago.

It also plans to scrap ranges for older children, focusing exclusively on maternity, newborn babies and toddlers up to pre-school.

The group said it was unclear what impact the Brexit squeeze on household finances will have on consumers, but said it will "inevitably flow into their household expenditure".

Its worldwide arm has received a boost from the pound, which helped flatter sales over the year, up 10.6%.

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