Mothercare remains under pressure

Mothercare delivered more downbeat UK trading figures today as the chain begins the task of slashing the size of its high street estate.

The group said UK like-for-like sales were down 4.3% in the 15 weeks to July 9, despite the same period a year earlier showing a decline of 4.1%.

Chairman Ian Peacock said UK trading conditions were “difficult and competitive” but insisted the company’s plan to focus on a more profitable portfolio of 266 UK stores by March 2013 was progressing well.

The overhaul, which was announced in May, will result in the closure of 110 high street outlets as Mothercare focuses on out-of-town Parenting Centres, which contain its Early Learning Centre brand.

Mr Peacock added: “The new store format trials have been well received by customers and the development of our new Mothercare web platform is on track.”

Mothercare has offset the sales downturn in the UK with rapid expansion overseas, with international sales up 18.2% at constant exchange rates in the 15 weeks to July 9.

Despite the overseas growth in the first quarter of the financial year, shares fell 3% today as analysts warned a continuation of the UK performance would lead to downgraded profit forecasts.

Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers, said: “The downsizing of the group’s UK operations can’t come fast enough for investors. The fall in same-store UK sales continues to accelerate, with the profit margin likely to have remained under intense pressure.”