Mothercare annual sales slip despite ‘solid’ fourth quarter

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Growth at British retail group Mothercare picked up at the start of this year but difficulties in its overseas business continued to weigh on its total revenues.

The baby specialist had a bumpy 2016, falling back into loss in its first half before returning to growth over the Christmas period. Like for like sales improved further in the 11 weeks to March 25, increasing 4.5 per cent compared to the same period last year.

Chief executive Mark Newton-Jones has been working to turn the company around since his appointment in 2014, closing underperforming stores and investing in online sales to improve Mothercare’s appeal for younger parents.

The company said today that online sales made up around 41 per cent of its total UK sales in the period.

The weak pound also boosted revenues from its struggling international businesses. Overseas sales increased 15.4 per cent on a reported basis, despite falling 1.7 per cent when the impact of currency moves is stripped out.

Mothercare said “many” of its international markets have returned to growth, though conditions in the Middle East remain challenging.

However, the strong fourth quarter was not enough to completely offset the company’s weak start to its financial year, and the company said total group sales for the 52 weeks to March 25 were 2.2 per cent lower than the previous year.

Mr Newton-Jones said:

Following a solid final quarter, our overall group performance remains broadly in line with market expectations for the year.

In our International business, we have seen strong sales in China, Indonesia and Russia supported by currency tailwinds, whilst the continuing economic conditions in the Middle East remain challenging. We continue to export our learnings from the UK and as a result, have launched ten new websites this year, bringing our total to 21 countries now trading online. We still see many opportunities in existing and new markets around the world that are open to us.

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