Mothercare suffers festive slump
The boss of baby products retailer Mothercare has insisted its turnaround plan was on track despite struggling to attract Christmas shoppers.
The slump comes after a return to sales growth the previous quarter, when UK like-for-like sales rose 0.3%, boosted by Mrs Oliver's Little Bird range and its value lines.
Experts said Mothercare, which now has 269 UK stores, was suffering as it faces strong competition from online retailer Amazon and the supermarkets, with Tesco this week launching an own-label baby and toddler brand called Tesco Loves Baby.
Seymour Pierce retail analyst Kate Calvert warned: "We do not believe Mothercare is an easy fix and brand repositions tend to take longer than expected."
But the group, which slumped to a £103 million loss last year, said the third quarter figures came against tough comparatives last Christmas.
Chief executive Simon Calver, who was brought in to lead the turnaround plan involving store closures and a revamp of its website, said the group had made solid progress, despite a challenging consumer backdrop in the UK and eurozone.
He said the group's recently revamped Direct in Home online platform had passed the test of peak trading, posting a 0.9% increase in sales over the period. The group also closed eight loss-making Early Learning Centre and three Mothercare shops, which saw total UK sales slump by 12.9%.
Matthew McEachran, analyst at N+1 Singer, said the timing of the Early Learning Centre closures and a tough toy market, where spending shifted towards technology, had also contributed to the decline in third quarter sales.
Mr Calver said the group's international business, where it is aiming to grow profits as it restructures its UK division, had seen double digit growth, with retail sales up 12%. It opened a net 31 new stores during the quarter and now operates from 1,129 stores across 61 countries.