Mothercare’s British sales fell drastically during the early part of this year with products for both mothers and babies witnessing challenging sales that its spokesperson attributed to negative press coverage due to restricting process carried out in May. The firm has already reported decline of 11 percent in sales within the UK and warned that its performance is likely to remain volatile. To tide over its slack performance the firm has already closed 20 stores across UK and four more are likely to close by Christmas while 36 more have been selected for closure. It announced that after its proposed management changes are complete it will have just 80 or less stores by April next year.
For the last quarter Mothercare has reported pre-tax losses of £ 14.4 million, which was better than £ 16.8 million posted last year. CEO Mark Newton-Jones, who returned back in May when the restructuring process began reporting that the first half of 2018 was very challenging for the company due to weak consumer demand and financial stresses faced by the brand. On the announcement of its results shares of Mothercare fell by 7 percent. As a part of its restructuring procedure, it underwent a voluntary arrangement to close down loss making stores to reduce rent payouts and also raised £ 28 million by issuing new shares.
This process was instrumental in reducing sales due to slowdown in store footfalls following negative press that floated during this period. After the restructuring process stores sales fell by 13.8 %, while online sales reduced by 7.8 % bringing down overall the UK sales of the brand by 14.3 %. GlobalData analyst said that online sales of Mothercare declined due to removal of almost half the toys in its Early Learning Center division as they were meant for older children. Mothercare’s international business has reported profits of £ 14.9 million compared to losses of £ 17.6 million in the UK.