Mothercare shares plummet on weak UK performance

5th Oct 2011 10:35

Mothercare, the FTSE 250 retailer which also operates the Early Learning Centre brand, has seen its share price plummet 30.6% on news of a 9.6% decline in like-for-like sales in the UK in the last quarter.Investors seem unimpressed at a 4.9% boost in total group sales, including its fast growing international division.This makes sense because although total international retail sales are up 17% many of its foreign branches are franchises or joint venture arrangements so not all income accrues to the main group.Mothercare's Chief Executive Ben Gordon said of the results:"Overall, total group sales increased by 4.9% in the second quarter reflecting a strong International performance and weak trading in the UK. We now have 1,322 stores in 55 countries, with 353 stores in the UK and 969 overseas."He went on to admit:"In the UK, trading conditions have become progressively more challenging and competitive, and our performance has been well below our expectations."Mothercare says it expects to open 150 new stores in 2011 at the same time as restructuring its UK business.Nevertheless, with a share drop of 30%, the board will be anxious to turn around the UK business quickly, or face growing pressure from shareholders.BS