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Mothercare halves UK losses as margin improves

Mothercare group sales fell by 6.1% to £349.9m but pre-tax profits were up 112.1% to £7m for the 28 weeks to October 10 as the baby and kidswear retailer continues its strategic turnaround.

Mothercare

Mothercare

UK like-for-like sales increased 3.8% and total UK sales by 236.6% while the UK underlying loss was £6.1m, down from £13.5m in the same period last year.

UK margin was up by 76 basis points and online sales were up 22% against 2014.

“Improved product architecture, better buying and a focus on full price retailing helped drive the stronger margin growth [in our UK business],” said chief executive Mark Newton-Jones.

“Our new store format is going down well with customers and these refurbished stores are delivering encouraging uplifts in both sales and profit.”

He added: “The UK is annualising against our new trading approach and is performing well; but there is still more work to do.”

International like-for-like sales fell 2.3% from a 4.9% rise last year and total international sales fell 5.2% to £367.7m, which Newton-Jones put down to increased economic and currency headwinds in a number of markets. The group continued to grow its international space, up 6.6% in the first half.

He said: “We expect the challenging environment to continue into the second half.”

Mothercare Group closed 16 underperforming stores (12 Mothercare and four ELC) in the UK, refurbished eight stores and resited four, ending the first half with 173 UK stores (163 Mothercare and 10 ELC).

Internationally, the group added a net 37 stores and 118,000 sq ft of retail space to its portfolio, closing 32 stores and opening 69 during the period. International now accounts for 66% of worldwide space and 66% of worldwide sales.

 

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