Mothercare sales drop in H1 2016/17

Mothercare is the latest retailer to feel the effects of the “challenging conditions” in the UK retail market. The childrenswear retailer reported a loss of £800,000 for the first half of FY 2016/17, compared with a profit of £5.8m in the previous year.

Underlying profit before tax was £5.9m, down from £7m a year earlier.

Sales in the UK stalled as a result of unseasonable weather, which also impacted margin growth as customers responded to heavier discounts, said the retailer. Meanwhile planned warehouse infrastructure changes meant a reduced flow of product for 8 weeks in the summer and an increase in operational costs.

UK like-for-like sales decreased 0.7%, while total UK sales decreased 2.3% to £231.2m. The UK arm of the retailer made a loss of £8.8m in the period.

International markets delivered a better performance with a 7.7% growth in total sales, however sales fell 2.9% on a like-for-like basis. Underlying profits for the international business were £20.8 million, down from £21.7m in the first half of last year.

During the period, Mothercare created international websites for Malaysia, Belarus and Turkey, taking the online availability of the brand to 14 markets.

Mothercare is in the second year of a turnaround programme.

“While conditions in the first half have been challenging, the second half has started in line with our plans and the business is well prepared for the important peak season. We expect to make further progress in the second half which will partially compensate for the effect of the headwinds experienced in H1,” it said in a statement.

The company now has 166 stores in the UK, and operates 1,339 international stores in 56 countries.

Mothercare sales drop in H1 2016/17

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