Mothercare chairman launches review after first-half losses

The retailer, which chief executive Ben Gordon leaves today following profit warnings earlier in the year, made an underlying loss of £4.4m at group level in the first half compared to profit of £12.2m last year.

Group sales, powered by Mothercare’s extensive international business, climbed 4% to £412.9m in the period to October 8.

Parker – who has assumed executive responsibilities until Gordon’s replacement is found - has launched a review of the UK business which he said would “consider the number, format and location of retail outlets and the plan for e-commerce”.

He said it will also include “the right-sizing of our overheads to fit the new operating base” and will be completed in the first quarter of 2012 and implemented thereafter.

Sales at Mothercare’s core UK business fell 4.3% in the period and slid 7% on a like-for-like basis resulting in an operating loss of £18.5m compared to profit of £2.8m previously.

Direct sales fell by £5.7m to £62m, which the retailer attributed to a difficult home and travel market – the category accounts for most of Mothecare’s online sales.

Total international sales climbed by 14.9% to £342.8m and international operating profit by 16.5% to £18.4m.

Parker said: “My first 100 days as chairman of Mothercare have confirmed my initial views regarding the strength of the Mothercare and Early Learning Centre brands, the significant global opportunity of our international business and our world class sourcing operation which is a core competency of the group.

“I am confident that we can return to a profitable and sustainable business in the UK over time.”