Mothercare reports a loss of £82 million

The retailer continues to perform internationally in H1; Plans a review into its UK business.
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Mothercare recorded a pre-tax loss of £82 million in the 28 weeks to October 8th, with a £78.5 million expense attributed to its ongoing property strategy. The retailer made a profit of £8.8 million in the same period last year.

Revenues were £412.9 million compared to £397 million in the first half of 2011.

Alan Parker, executive chairman, said: "The Mothercare group has had a difficult first half. Whilst the International business continues to perform strongly our performance in the UK illustrates the extent of the challenges facing the business in a weak economic and consumer environment."

Parker announced a structural and operational review to evaluate the 'size and shape' of Mothercare’s UK business. He said: "This review will consider the number, format and location of retail outlets and the plan for e-commerce. It will also include the right-sizing of our overheads to fit the new operating base. The review will include the important Christmas trading period and will be completed in the first quarter of the calendar year with implementation in 2012/13."

Mothercare anticipates that the UK consumer environment will ‘remain difficult’ throughout the Christmas period and expects return to profitability once its ongoing property strategy, which involves the closure of 110 High Street stores, is fully executed.

Internationally, Mothercare expects its sales to continue growing by 15 to 20 per cent per annum with plans to 150 stores abroad each year.

Mothercare continues its search for a new CEO following the departure of Ben Gordon in October.

Parker said: "The search for our new CEO is proceeding on plan. We are determined to find the right candidate for this important role. In the interim period, the Board has appointed me to the role of Executive Chairman and I will continue to lead whatever decisions are necessary to restore profitability to the UK and create the structure for long-term success."


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