Mothercare boss cautious despite return to profit
MOTHERCARE boss Simon Calver warned yesterday that consumer spending was unlikely to improve in the near future despite Britain’s more positive economic outlook, as the baby products retailer swung back to profit.
The group, which sells everything from pushchairs to nursery furniture and maternity clothing, posted an underlying pre-tax profit of £2m in the 28 weeks to 12 October, up from a loss of £1.8m a year ago – its first profit since 2011.
In Britain, where it generates around 40 per cent of its sales, operations are still in the red, but underlying losses fell 12 per cent to £14.9m.
Calver embarked on a three-year plan last year to turn around Mothercare’s struggling UK arm that has included launching new ranges, and pricing its clothes more competitively while revamping and closing unprofitable stores.
The retailer has stemmed the decline in UK like-for-like sales to 1.4 per cent – from 3.4 per cent the year before. Total sales fell 7.5 per cent after it closed 18 stores in the period. But despite the improvement, Calver said the group was planning for consumer spending to remain subdued in the UK during the second half of the year.
“We continue to target a return to profit in the UK and the reduced UK operating loss this half year is a step in the right direction,” he added.
Meanwhile its overseas business, which includes 1,156 stores in 59 countries, posted double digit growth, with sales up 13 per cent in the period.
Sales at stores open over a year grew by 4.8 per cent.