Updated: Fri, 11 Apr 2014 00:02:20 GMT | By Press Association

Mothercare defiant as sales firm

Mothercare lifted some of the gloom surrounding the company today by revealing a more resilient UK sales performance so far this year.


CPP Group sold card protection on behalf of lenders including HSBC and Royal Bank of Scotland

CPP Group sold card protection on behalf of lenders including HSBC and Royal Bank of Scotland

Mothercare lifted some of the gloom surrounding the company today by revealing a more resilient UK sales performance so far this year.

The retailer, which has 220 stores under the Mothercare and Early Learning Centre brands, said like-for-like sales were just 0.3% lower in the 12 weeks to March 29, against a 1.9% fall for the whole financial year.

Chairman Alan Parker described the performance as encouraging following the profits warning issued in the wake of poor Christmas trading. In February, chief executive Simon Calver left the group after less than two years in charge.

Mothercare shares jumped 14% after today's update, which also showed improved underlying trading at its international business.

In the UK, Mothercare said it continued to close loss-making stores and develop its multi-channel business, with the mix of sales attributable to its Direct internet operation rising to 29% from 25% in the previous year.

The UK business, which made a loss of £21.7 million during the 2013 financial year, has been hampered by price wars in home and travel goods.

Mr Parker said: "We remain profitable at group level and are focused on eliminating UK losses whilst also continuing to exploit our growth potential across our international markets."

International sales rose 9.8% in constant currency terms but the impact of sterling's strength has had an adverse impact on the reported figure.

Mothercare recently appointed Mark Newton-Jones, the former boss of Littlewoods business Shop Direct, as interim chief executive.

J oseph Robinson, of retail consultancy Conlumino, said the challenge facing Mothercare was to compete effectively on price against value players such as the supermarkets, as well to ensure the attractiveness of its products against more premium peers such as John Lewis and Mamas & Papas.

He added: "Despite a relative improvement in performance, Mothercare faces an uphill struggle to turnaround an ailing UK business, with strong competitive threats at both end of the spectrum.

"However, it is becoming clear that a burgeoning overseas presence - which has afforded the group vital breathing space in attempts to turnaround the UK business over past few years - will define Mothercare's future."

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