Mothercare’s losses have deepened further in Britain and overseas after the baby and mother retailer placed its UK business into administration last month.
Group sales fell by 8.4 per cent to £452.3 million in the six months to October 12, as pre-tax losses widened to £21.2 million from £18.5 million in the same period one year before.
Mothercare’s decision to shutter its UK operations – a total of 79 stores at the time of entering administration – was made in order to allow the group to focus on expanding its international business.
Mark Newton-Jones, Mothercare’s chief executive said the retailer had been through an “extraordinarily challenging period” bu that the move would complete Mothercare’s transformation “into a capital-light business, which is expected to be both cash generative and profitable.”
He added: “We are confident in the future of the Mothercare brand. We believe that, without the financial and management burden of running a UK retail operation, we can singularly focus Mothercare on its global international franchise.”
However, the half year figures tell a worrying story for this plan, showing a 5.7 per cent slide in sales at Mothercare’s overseas stores, while pre-tax profits dropped by 21 per cent to £12.2 million.
The retailer has said that trading had been difficult in the Middle East and China, but growth was strong in key markets of India, Indonesia and Russia.
The company said it was also discussing a franchise deal for Mothercare in the UK, an announcement of which would be made in due course.