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Mothercare blames British weather for slump in sales

Mothercare’s total group sales fell by 1.7% in the first quarter after trading in the UK was hit by the unseasonable weather.

Mothercare

Mothercare

UK sales fell 2.1% in the 15 weeks to July 9, partly as a result of a planned reduction in space. Like-for-likes were up 1.2%.

The maternity and childrenswear retailer was forced to bring its end-of-season Sale forward by a week to clear some of the unsold summer stock.

As a result, chief executive Mark Newton-Jones said it was too early to say whether there had been any “immediate consumer reaction” to last month’s Brexit vote.

International sales were up 3.9% on a constant currency basis. Around half of that growth came from the Middle East, following the earlier timing of Ramadan this year.

Actual currency sales were up 5.1%. The Middle East and Asia reported foreign exchange gains during the quarter, but Mothercare said the impact on profit would be limited because of the hedging of royalty receipts

Newton-Jones said: “Our focus remains firmly on the turnaround of our business and putting strong foundations down for the future and we have made further progress during this quarter.

“In the UK sales were impacted by unseasonable weather. This resulted in bringing our end-of-season sale forward by one week to ensure a cleaner stock position, while also making way for the new season’s ranges. We continued with our refurbishment of stores in the quarter and continued to improve our customers’ shopping experience both instore and online.

“International sales were materially helped by the timing of Ramadan, which was entirely in Q1 this year. We remain cautious and expect to see continued volatility during the first half of the year in our international business.

“We have not seen any immediate consumer reaction to the Brexit vote, but it is too early to call as we went into the end-of-season Sale early. We hedge both dollar purchases and royalty receipts, and we expect limited impact on our financial results this year.”

 

 

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