Mothercare sales fall despite online cheer


Sales in baby goods retailer Mothercare have fallen, but online traffic is up.

The retailer reported like-for-like sales fell 2.8% in the last 12 weeks owing to decreased consumer footfall.  But internet sales were up 2.1%, with purchases from its own website up 7.2%.

Mothercare chief executive David Wood said in a statement,

“The UK retail trading environment remained relatively muted in the quarter, with a continuing trend of lower footfall in stores, in this competitive climate, promotional activity has been necessary to stimulate customer demand

Reducing Retail space 

The company also indicated that its strategy of moving away from bricks-and-mortar is continuing.  Earlier this year, the retailer said it would cut its store numbers from 140 to 80, in response to the trend to online shopping.  Mothercare’s boss said: “My immediate priority is to ensure Mothercare is put back on a sound financial footing and to improve its financial performance.  “We continue to make good progress in reducing the size of our UK store estate in response to changing consumer preferences.”

Banking on future financing 

Mothercare has struggled to managed its growing debt and has brought in consultancy firm KPMG to help with financial restructuring.

Mr Wood added,

We continue to explore additional sources of financing to support and maintain the momentum of our transformation programme,

The company is currently in negotiations to secure more funding and is expected to update the public and shareholders in May, when it next publishes results.
The global retailer hopes to avoid the fate of the likes of Toys R Us – which was forced to close all of its UK stores earlier this year – as shoppers increasingly turn to online to make their purchases.