Mothercare warns on profits as it seeks to offload UK arm
Mothercare has warned that its full-year losses are likely to be in line with its previous financial year’s as it kicks off talks to sell struggling UK stores.
The specialist retailer said that it had revised its pre-tax profit expectations as it predicts that “the UK market will continue to be uncertain and volatile” in the medium term, resulting in a need for higher-than-anticipated promotional activity.
The struggling retailer, which recorded a 23.2% decline in UK sales in the 15 weeks to July 13 exacerbated by last year’s CVA, has said that it plans to create “the optimal structure for UK retail operations as an independent Mothercare UK franchise.”
In like-for-like terms the rate of decline in sales slowed to 3.2% bolstered by discounting, but boss Mark Newton-Jones said the retailer had “observed a lower than expected transfer of sales following the CVA store closure programme which completed in early April 2019.”
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