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Mothercare shares nosedive by 30 per cent following profit warning

Mothercare’s share price has slumped after it issued a profit warning following disappointing sales over Christmas.

Shares in the retailer crashed by more than 30 per cent to an all time low of 42.05p and later traded down 27 per cent at 42.5p.

At this level, the company is valued at just £77m.

The chain said UK like-for-like sales had slumped by 7.2 per cent in the 12 weeks to December 30th, with online sales falling 6.9 per cent. Online sales make up 42 per cent of its total UK sales, with two-fifths of digital sales coming from iPad purchases made in store.

Mothercare is now predicting a pre-tax profit of £1m to £5m for its financial year to the end of March.

The maternity and childrenswear specialist is the second big high street name to warn on profits after Debenhams said last week it would cut jobs and close more stores following a poor festive period.

At least 20 retailers will reveal over the next few days how they performed over Christmas. Tesco is expected to be one of the winners, while Marks & Spencer is still struggling. Both are due to issue their trading updates on Thursday alongside House of Fraser.

Mothercare chief executive, Mark Newton-Jones, said: “There has been a softening in the UK market with lower footfall and website traffic resulting in lower spend in both stores and online. This trend has continued.”

He added that customers were waiting until promotional periods to shop.

Since taking the helm three years ago, Newton-Jones has closed 100 loss-making UK outlets and modernised 70 per cent of the remaining stores.

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