Mothercare sales pick up after Christmas downturn

Babycare retailer Mothecare today said it expected annual results to meet hopes as sales picked up after a Christmas downturn.

Mothercare said like-for-like sales in its UK stores rose 1.1% in the 11 weeks to March 26, with total sales lifting 1.6%. International sales increased by 17.3% in the year to the same date.

The UK-based babycare giant has 11 outlets in the Republic and eight in northern Ireland.

The group, which is restructuring its business, suffered a 1.6% fall in UK same-store sales during the eight weeks to January 7 due to weak demand for toys.

It said today that it would take a £6.5m (€9.4m) charge for reorganising its distribution network and would make a special £10m (€14.5m) contribution to its pension schemes.

However, chief executive Ben Gordon described the performance of the UK business as “resilient in the tougher trading environment. We expect the outturn for the year to be in line with market expectations,” he said.

Mothercare has more than 160 high street outlets and 69 out-of-town branches in the UK as well as 220 international franchise sites. It opened an extra 30 shops during the year,

It recently passed the half-way stage of its three-year turnaround plan, which has involved an overhaul of its high street stores and depots.

The firm is building a new £13m (€18.9m) national distribution centre at Daventry to increase the availability of reserve stock and enable its logistics team to make deliveries on time.

It has also developed new product ranges including furniture for “first bedrooms” such as beds and wardrobes.

In a trading update today ahead of full year results on May 19, it said total UK store sales in the 24 weeks to March 26 increased by 0.5%, with UK store like-for-like sales up 0.1%.

In the 52 weeks to the same date, total UK sales increased by 0.8% while same-store sales advanced 1.3%.

Mothercare said the construction of the new distribution hub was progressing to plan and it was due to transfer the first stage of its operations to the new site in June.