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Sales drop at struggling Mothercare

Mothercare has announced a further drop in sales, with worldwide sales falling 4.8% for the full year to 24 March 2018, as the ailing retailer continues to battle a series of challenges.

Like for like sales in the UK dropped 1.3% for the year, and total UK sales fell by 4.8%. International sales in constant currencies also fell by 5.8%.

The poor UK performance was attributed to a continuing trend of low footfall, with international hindered by lower footfall in Russia. However, Mothercare highlighted the Middle East region as a showing promising signs of growth, although it did not disclose figures.

The retailer did, however, see online sales in the UK return to growth, inching up by 1.2% for the year and now comprising 43% of all UK sales.

Guidance on profit and net debt was in line with expectations.

Performance for the 12 weeks to 24 March 2018 showed the same pattern, with UK like-for-like sales down 2.8% and total UK sales down 5.6%. Website sales were up 7.2%. International retail sales in constant currency were down 3.7% and total worldwide sales fell 9.2%.

The results come after a difficult few weeks for the retailer, with profit warnings, rumours of an impending CVA and possible store closures dogging the business.

Earlier this month, Mark Newton Jones stepped down from his role as CEO, replaced by former Kmart Holding group president David Wood.

Commenting on the latest results, Wood said: “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.

“We remain in constructive dialogue with our financing partners with respect to our financing needs for FY19 and beyond, and we continue to explore additional sources of financing to support and maintain the momentum of our transformation programme.”

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