Mothercare swings to loss on weather, warehouse changes

Mothercare swung to a loss in the 28 weeks to 8 October as the retailer’s sales were hit by unseasonal weather and changes to its warehouse infrastructure.

The company reported a pre-tax loss after exceptional items and non-underlying items of £800,000 from a profit of £5.8m the year before, with total group sales down 0.6% to £347.7m.

Like-for-like sales in the UK were down 0.7%, while total sales in the UK were 2.3% lower at £231.2m.

Mothercare said sales in the UK were dented by poorer weather over the summer, which meant higher stocks and then deeper discounts. In addition, it said that while its planned warehouse infrastructure change has been successfully completed, it meant a reduced flow of product for eight weeks in the summer and a one-off increase in operational costs as the systems bedded in.

International sales fared better, however, up 7.1% to £399.9m, boosted by favourable currency movements.

Chief executive Mark Newton-Jones said: "While conditions in the first half have been challenging, the second half has started in line with our plans and the business is well prepared for the important peak season. We expect to make further progress in the second half which will partially compensate for the effect of the headwinds experienced in H1.

"We continue to see opportunities to further develop and improve our business both here in the UK and in our international markets. Our vision remains clear: to be the leading global retailer for parents and young children."

At 1010 GMT, Mothercare shares were down 6.7% to 104.00p.