Maternity wear and babies' apparel chain Mothercare Plc on Friday posted a 3.4 per cent hike in same-store sales for the 15 weeks to July 11 as it looked to put its past distribution problems behind it.

The Watford-based operator of around 250 stores said in a statement ahead of its annual general meeting gross margins were up five percentage points on 2002 thanks to a greater emphasis on full price trading and improved buying margins.

Chairman Ian Peacock said: "Warehousing and distribution is now working effectively and the resulting availability improvement has benefited both sales and margins."

In May, Mothercare reported a pre-tax loss before exceptionals of £19.6 million versus a year-ago profit of £4.2m and announced plans to shut 15 under-performing stores.