UK: Mothercare plans UK review after H1 loss
- H1 adjusted pre-tax loss of GBP4.4m, versus GBP12.2m profit
- Total sales up 5.4% to GBP623.9m
- Announces structural review of UK operations
Retailer Mothercare has announced a structural and operational review of its UK business after sliding to a first half underlying loss of GBP4.4m (US$6.9m).
The UK business was also hit by a one-off exceptional charge of GBP78.5m, including a write-down of UK goodwill and other intangibles, and a UK property restructure charge.
That gave the company a first half reported net loss of GBP81.4m, compared to a profit of GBP0.3m a year ago.
Group sales rose 4% to GBP412.9m, with international retail sales up 15.7% to GBP338.3m offsetting a 4.3% slump in UK sales to GBP281.1m, and a 7% decline in UK like-for-like sales. Meanwhile, direct in home sales fell 4.2% to GBP42.6m, and gross margin was down 4%.
Executive chairman Alan Parker described the trading period as “difficult” and said: “Whilst the international business continues to perform strongly, our performance in the UK illustrates the extent of the challenges facing the business in a weak economic and consumer environment.”
Parker said the UK review would consider the number, format and locations of the company’s retail outlets and its plans for e-commerce.
“The review will include the important Christmas trading period and will be completed in the first quarter of the calendar year with implementation in 2012/3.”
Meanwhile, he added, the search for a new CEO to replace Ben Gordon was “proceeding on plan”.
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