Mothercare plc, the leading international mother and baby retailer, issues the following trading update, which covers the 15 week period to 12 July 2014.
Overview for Q1 - 15 weeks to 12 July 2014
-International back to double-digit growth with space up 13.3% and constant currency sales up 14.7%. As anticipated currency devaluation has impacted reported retail sales
-Global retail space up 7.1% year-on-year with 4.5 million sq.ft. and 1,476 stores in 60 countries
-UK like-for-like sales up 0.9% and decline in total UK sales in line with space reduction
-Worldwide network sales up 0.2% with Group reported sales down 1.8%
-Reduced discount activity in the UK has led to lower sales online at better cash margins, which was in line with expectations
-Mark Newton-Jones confirmed as Chief Executive Officer
Alan Parker, Chairman of Mothercare plc, said, "I am delighted to welcome Mark Newton-Jones as Chief Executive Officer. Mark is a first-class retailer with more than 30 years of experience and a highly successful track record. His business transformation expertise gives me confidence that we will achieve our plan to turnaround the UK business and continue our strong International growth.
"Mark has already made a substantial difference in many areas since he joined us, including the introduction of a new approach to trading and we have made an encouraging start to the year. I am pleased that our International business has returned to double-digit constant currency growth and the UK has reported a small positive number for like-for-like sales growth."
Mark Newton-Jones, Chief Executive Officer of Mothercare plc, said, "I am very much looking forward to leading the Mothercare Group at this pivotal time in its history and to be here to lead the turnaround of the business.
"Mothercare and Early Learning Centre are two iconic UK retail brands which have both developed into significant international businesses, serving parents and young children in 60 countries. We now need to put in place the building blocks to strengthen the UK performance and I believe there is then a tremendous opportunity to take this business forward. It will be a pleasure to work alongside Mothercare's team of passionate and knowledgeable colleagues as we rebuild the UK and continue to grow our global presence."
Update on Q1 trading
International space was up 13.3% and the stores generated mid-single digit like-for-like sales and double-digit constant currency retail sales growth of 14.7%. As anticipated currency devaluation impacted the reported number and the hedging policy now in place is mitigating some of this risk.
Our UK performance, helped by the work the team has delivered over the last year, is starting to stabilise sales as seen in our like-for-like sales which grew slightly to 0.9%. We are taking a different approach to the business, by moving away from aggressive discounting and concentrating on full price sales. This has impacted online sales where most discounting has traditionally taken place.