Mothercare bounces back after sales blip

Babycare retailer Mothercare today said it had recovered from a hiccup in is sales revival as it moved to wring further costs from the business.

The group told investors that like-for-like sales grew by 0.5% in the five weeks to November 12, bouncing back from a 0.2% fall in the previous 13 weeks.

The update on trading came as Mothercare posted profits of £10.9m (€15.5m) in the 28 weeks to October 9. This was lower than the £13.4m (€19.1m) of a year ago, which included an exceptional gain of £3.8m (€5.4m) on property.

Chief executive Ben Gordon said the group was making good progress after reaching the half-way stage of its three-year turnaround plan.

Mothercare has refitted 81 of its 163-strong chain of high street stores in the UK, improved product ranges and recently opened its first new store in two years.

At the same time, it has cut costs by sourcing 30% of its clothing directly from suppliers, with a target of increasing this to 50%.

Supply chain costs fell to 6.3% of sales during the first half and Mothercare revealed today that it will build a new £13m (€18.5m) British distribution centre at Daventry.

It is aimed at increasing the availability of reserve stock and enabling its logistics team to make deliveries on time.

In addition to its high street outlets, Mothercare has 69 out-of-town branches in the UK and 200 international franchise sites.