Mothercare plans UK store franchise as sales continue to fall

Nursery and maternity products retailer Mothercare has released its latest trading update, with sales falling against a ‘challenging’ market.

The retail group chose its Q1 trading statement and AGM to announce that it is already in the process of switching its UK retail arm into an independent franchise.

Overall sales in the 15 weeks to July 13 were down by 23.2%. This was a result of the chain’s extensive closure programmes that saw Mothercare’s store portfolio reduce by almost 30%. Like-for-like UK sales – which cancel out the impact of the store closures – were down 3.2%, while online sales were also down, by just over 12%.

Mothercare stated that its profit margins remained under pressure as it had been forced to continue promotional activity in order to stimulate sales, both in its stores and online, due to the ‘uncertain and volatile’ UK market.

Chief executive Mark Newton-Jones said: “Our immediate priority is to complete the transformation of the business with a near-term focus on evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise.”

He continued: “Despite a difficult backdrop, we continue to improve our customer offer and have launched a number of new initiatives including specialist sales and service training to all our store colleagues.”

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