MOTHERCARE delivered more gloomy UK trading figures – as the chain begins slashing the size of its high street estate.
The group, which has a store at Great Northern Street Retail Park, said UK like-for-like sales fell by 4.3% in the 15 weeks to July 9. That compares with a 4.1% decline for the same period last year.
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 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 said: “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. International sales rose by 18.2% at constant exchange rates in the 15 weeks.
Despite overseas growth, shares fell by 5.6p to 405p yesterday as analysts warned a continuation of the UK performance would lead to downgraded profit forecasts.
Keith Bowman, 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.”
Mothercare, which has 1,289 stores in 55 countries, opened its 900th overseas shop during the quarter under review.
It said Mothercare and the Early Learning Centre brands saw strong growth in the Middle East and Asia Pacific, while it is also developing its presence in its newest market of Latin America.
Mr Peacock said the group was making good progress internationally while improving the efficiency of the UK business.