Mothercare profits and sales boosted

The retailer reported that holding off their festive sales until Boxing Day has resulted in the stabilization of the overall business. The group has faced several disastrous years, as competition grows.

The company owns the Early Learning Center chain and stated that for the 13-week period ending January 10, like-for-like sales increased by 1.1%. This comes in spite of a store closure event which reduced their sales space by 4.2%. Overall sales indicated a 1.9% decline in UK revenues.

Over the same period, global sales, a combination of wholesale income, international retail and UK sales, increased by 2.2%. Total group sales, which is a total of UK sales, international partner receipts, including royalties, and cost of goods delivered to franchise partners, declined by 2.9%.

Chief executive, Mark Newton-Jones, launched a rights issue to fund IT improvements, debt reduction, refurbishments and store closures, in a bid to secure the future of the company.

He stated that the trading update is in line with their plans. He added that in the UK the company continued the reduction of promotional activities and held off on their end of season sale until Boxing Day, when they had less stock available. The actions that they have taken have resulted in the re-establishment of Mothercare as a full price retailer and have stabilized their margin.

Internationally, the group has seen growth in all regions, in spite of the uncertainly in certain markets.

The company’s online stores have shown good growth over the 13-week period, with an increase of 16.1%. Online sales now account for 31.8% of the overall UK sales.

The company’s shares increased by almost 3% during early trading, but later fell back to 1.1%.