Mothercare's first quarter disappoints despite international gains

18th Jul 2013 07:58

Baby products retailer Mothercare disappointed with first quarter results after its transformation and growth plans were held back by worse UK numbers than expected.A 7.9% slump in total UK sales in the 15 weeks to July 13th dragged total group sales down 3.4%, worse than the 3.0% analysts had pencilled in. Chief Executive Simon Calver said the highly competitive UK market was very promotion-led and made it difficult for the company to achieve the goal to be price competitive while delivering cash margin. In line with his 'Transformation and Growth' turnaround plan, Calvver oversaw the closing of 13 loss-making stores during the period, reducing store space 7.7% and leading to the slump in total sales."Whilst we still have a way to go," Calver said, "I am encouraged by the improving positive feedback from our customers to the necessary changes in the UK, particularly to product innovation and new clothing ranges."Encouragement in the UK could be taken from online sales via the Direct at Home business, up 14.6%. Overseas, the company is booming, with worldwide network sales up 4.8% and international retail sales up 14.1%, or 11.3% in constant currency, despite the early timing of Ramadan. Overseas store space was expanded 14.0% year-on-year, with the opening of a net 47 stores during the quarter to give the group 1,116 franchise stores across 60 countries.Said Calver: "As planned, we are continuing to close loss making stores and pressing ahead with our cost saving initiatives. Trading conditions have been challenging both in the UK and across our Eurozone markets and are expected to remain so for the rest of the year."Shares in Mothercare were down 5.3% at 445p at 08:15 on Thursday. OH