Mothercare has revealed that its losses increased 20% during its last financial year but the ailing retailer highlighted that it was now starting to see “improving trends” in its core UK market following a major restructuring of the business.
Over the 53 weeks to 30 March 2019, the baby goods retailer recorded a pre-tax loss of £87.3m on revenue down 13.5% to £566.3m.
The figures were partly impacted by its UK store closure programme which has reduced its number of outlets from 134 to 79. It also sold its ELC toy unit to the Entertainer for £11.5m and its head office in Watford for £14.5m, with proceeds used to reduce its debt.
Like-for-like sales in the UK plummeted 8.9%, with group saying it had suffered from reduced consumer confidence in the brand following its refinancing, together with wider market uncertainty. Its online operation, a key area for the group, saw sales fall 8%.
However, Mothercare highlighted that it had seen improvements in trade in the later part of the year with this continuing in the early stages of its new financial period.
CEO Mark Newton-Jones commented: “We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business…Whilst this major restructuring activity has resulted in significant headline losses for the year, the business is now on a sounder financial footing.”
He added that the next phase of its transformation plan was to develop Mothercare as a “global brand, maximising the opportunities we see across many international markets”.
Meanwhile, its primary focus in the UK will be “the development of our online proposition, the introduction of enhanced credit options and more exclusivity in product, coupled with a reinforcement of our specialist and service credentials.”
