Mothercare sinks into deeper loss as sales slip
Retailer Mothercare fell further into the red in the first half of the year, with its loss before tax rising to £21.2m in the six months to the end of October.
The baby wear retailer also saw net debt rise to £24.5m in the period, representing a 14.4 per cent increase year on year.
Read more: Mothercare shares surge after UK business enters administration
Worldwide sales were down 8.4 per cent annually over the first half of 2019-20.
This was on the back of a two per cent fall in domestic like-for-like sales and a 5.7 per cent fall in international like-for-like sales.
It comes after Mothercare appointed administrators for its 79 UK stores last month after company bosses found it was “not capable of returning to a level of structural profitability”.
Stores across the country are in the midst of closing down sales to get rid of stock.
Senior analyst at asktraders.com Steve Miley said “there was nothing to celebrate in the report”.
“Cold winds are blowing down the UK high street, if a retailer under-invests in its online offering clouds will quickly gather on the horizon,” he said.
“Mothercare forms part of a growing list of retailers that have stumbled or collapsed this year.
“Whilst the potential for easing Brexit uncertainty next year could help boost consumer confidence, changes to shopping habits are here to stay.”
Mothercare chief executive Mark Newton-Jones said: “This has been an extraordinarily challenging period in Mothercare’s 58-year history, particularly for our committed, hard-working colleagues who have worked tirelessly to sustain our UK retail operation.
“It was simply not financially viable to maintain the UK store estate and supporting infrastructure any longer without putting the whole Mothercare Group at risk.”
Analysts have said Mothercare’s downfall was largely due to an inability to adapt to the digital marketplace.
Richard Lim, chief executive at Retail Economics, said the retailer had been beaten “on price, convenience and the overall customer experience”.
“Years of underinvestment in the online business and its inability to differentiate itself as a specialist for young families and expectant parents has been the root of its seemingly inevitable downfall,” he said.
Read more: Mothercare shuts up shop in UK as PWC called in for administration
Mothercare’s downfall comes in a poor year for retailers.
Fellow High Street brand Thomas Cook also collapsed, while shoe retailer Clarks is also struggling to stay viable.