1. News
July 29, 2019

Mothercare sales affected by extensive store closure programme

UK retailer Mothercare has reported that total groups sales fell by 9.2% for the 15 weeks ending 13 July.

UK retailer Mothercare has reported that total groups sales fell by 9.2% for the 15 weeks ending 13 July.

The company noted that the negative impact was driven by the extensive store closure programme.

The retailer reported a 23.2% decline in total UK sales for the period, lower than last year, and international retail sales declined by 4.5% in constant currency.

The company’s online sales declined by 12.1% due to the impact of store closure programme and the loss of iPad sales in those stores.

In its FY20 Q1 Trading Update, Mothercare CEO Mark Newton-Jones noted that the ‘gross margin improvements in the UK are expected to take longer to materialise than previously anticipated’.

Mothercare expects the medium-term outlook for the UK market to be ‘uncertain and volatile, accompanied by fragile consumer confidence’.

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Franchise partners of the retailer continue to invest in the brand, increasing space by 5.6% to 2.7 million square feet across 1,014 stores.

The company currently operates 79 stores in the UK, which is down from 134 stores last year.

Meanwhile, a report by SkyNews said that Mothercare is in negotiations with ‎third parties to offload or separate its store operations in the country.

Mothercare CEO Mark Newton-Jones said: “The process of restructuring and rebuilding a sustainable business continues, and we have in place financing plans to support these actions as we aim to be bank-debt free by the end of the year.

“Our immediate priority is to complete the transformation of the business with a near-term focus on evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise.

“We will provide a further update at our Interims Announcement on the 28 November this year.”