Mothercare UK revenues fall further

Worldwide network sales, however, rise again by 4.5 per cent.
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Mothercare has released its results for the 12 weeks ended October 1st, 2011. Total group sales for the period were up by 4.9 per cent. Worldwide network sales increased by 4.5 per cent and international retail sales soared by 17 per cent.

Ben Gordon, chief executive at the retailer said, however, that trading conditions in the UK have been 'progressively more challenging and competitive' and the performance in the home territory has been 'well below our expectations.'

He continued: "We have seen a downturn in consumer confidence in the weeks following the UK riots and trading has deteriorated further in the last four weeks. In particular, the Home & Travel market has been affected by customers trading down on bigger ticket items and, although we have held market share, this has had a significant impact on our Direct business.

"Against the backdrop of this weakening trend, we believe that the outlook for the UK business in the important second half has materially worsened and this is likely to lead to a disappointing performance for the year as a whole."

In the UK, total sales fell by 6.4 per cent and like for like revenues were down 9.6 per cent. Direct in Home revenues also decreased by 6.9 per cent.

For the half year results, worldwide network sales were up 5.7 per cent and total group sales increased by 4.9 per cent. International retail revenues were again up by 16 per cent.

The half year results showed that total UK sales were down four per cent, with like for like revenues decreasing by 6.8 per cent. Direct in Home sales were down by two per cent over the period.

Gordon commented:

"Overall, total group sales increased by 4.9 per cent in the second quarter reflecting a strong international performance and weak trading in the UK. We now have 1,322 stores in 55 countries, with 353 stores in the UK and 969 overseas.

"International continues to perform strongly with retail sales up 17 per cent in the second quarter. Both brands continue to expand globally and we have opened a net 75 new overseas stores this year. We are on track to achieve the full year target of 150 new stores and international retail sales growth of 15 to 20 per cent.

"The restructure of our UK property estate and the cost reduction programme recently announced are progressing well and our financial position remains robust, helped by our strong cash-generative International business and the refinancing of our facilities in May.

"Despite the difficult trading conditions in the UK, our strategy of focusing on the rapid global expansion of our brands whilst restructuring the UK business will create long-term sustainable value for shareholders."

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