Mothercare has suffered a drop in sales during a “muted” fourth quarter as a slowdown in customer traffic to its high street stores impacted performance.
The nursery specialist said like-for-likes in its core UK market slipped 2.8% during the 12 weeks to March 24 as it continues to endure a tough period of trading.
New chief executive David Wood was drafted in to replace Mark Newton-Jones at the helm earlier this month in a bid to revive the specialist retailer’s fortunes.
Wood said today his “immediate priority” was to “ensure Mothercare is put back on a sound financial footing and to improve its financial performance”.
Although like-for-likes in its domestic market fell, Mothercare hailed a return to sales growth online.
Ecommerce sales advanced 2.1% during the quarter – a contrast to the 6.9% decline suffered in the prior period.
However, Mothercare’s total UK sales fell 5.6% in the quarter and 4.8% across its full financial year.
The business said the decline was driven by “reduced store consumer footfall” and its ongoing store rationalisation programme, which led to a 10.7% drop in store selling space.
International revenues also slipped during the quarter, tumbling 3.7% in constant currencies and 11% at actual rates.
Total group sales were broadly flat, inching down 0.3%.
As previously reported, Mothercare is thought to be considering a CVA as it ramps up plans to revive its fortunes.
Its market value has crashed below £30m, but speculation last week that Sainsbury’s had looked at buying the business briefly sparked a share price rally.
Immediate priorities
New boss Wood admitted promotional activity had been “necessary to stimulate customer demand” during the quarter.
He added: “The UK retail trading environment remained relatively muted in the quarter, with a continuing trend of lower footfall in stores, though there was an encouraging return to growth online, with website sales in particular growing at 7.2%.
“My immediate priority is to ensure Mothercare is put back on a sound financial footing and to improve its financial performance.
”We continue to make good progress in reducing the size of our UK store estate in response to changing consumer preferences and in reducing our central cost base, but our central focus must be customers and their experience, securing Mothercare’s reputation as the number one specialist for parents.”
Wood said Mothercare remained in “constructive dialogue” with financing partners and would “continue to explore additional sources of financing” in order to support its transformation programme.
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