Mothercare crawls back to health in UK

Buggy-to-babywear retailer Mothercare has seen further signs of improvement in its UK operations with its fourth consecutive quarter of like-for-like sales growth.

The pick-up came despite Mothercare reducing promotional and discount activity at its troubled domestic business under a strategy shift led by Mark Newton-Jones, who became chief executive last year. The company has also been cutting back its UK store network

Like-for-like sales rose by 5.1 per cent in its fourth quarter, covering the 11 weeks to March 28. Total UK sales growth of 1.5 per cent was lower due to the impact of store closures.

International sales were much stronger but currency movements reined in growth to 11.4 per cent. That was slightly slower compared with the previous three months, when international retail sales surged 14.4 per cent.

Mr Newton-Jones said: "In the UK, our strategy of reducing promotional and discount activity and returning to being a full-price retailer has continued to stabilise margin. By restricting discount periods we produced a stronger end-of-season sale with improved sell-through rates as a result."

He added: "Like-for-like and online sales have also benefited from this approach along with the initiatives to improve product and service put in place during the year. In International, the underlying businesses remain robust but economic pressures have affected sales."

Total worldwide sales - excluding royalty payments from international retailers of Mothercare product - rose 4.1 per cent during the period.

Mothercare has been shrinking its estate in the UK. It ended its financial year to March 28 with 189 stores in its home market, a 4.5 per cent reduction in space on the previous year. The company had earlier announced that it wanted to shift its focus to out-of-town stores rather than high street locations.

Shares in Mothercare rose 7 per cent to 227.31p in early London trading.

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