Blacks and Mothercare sales bring cheer to the high street

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The Independent Online

The high street retailers Mothercare and Blacks Leisure both reported further evidence of a recovery in their fortunes.

Mothercare, the maternity-to-baby goods chain that spent last year wracked by distribution problems, said trading had continued to improve in the past few weeks. Like-for-like sales rose 3.4 per cent in the 15 weeks to 11 July, while the gross margin leapt 5 percentage points. "It's an encouraging start but we were up against weak comparatives and it's early days - in the year and in the recovery programme," said Ben Gordon, the former Disney executive who took over as chief executive last December.

Mr Gordon unveiled a three-year recovery drive in May, centred on improving the company's product ranges and supply chain, and revamping tired stores. "We are trading much more aggressively," he added. Mr Gordon said the gross margin had been buoyed by selling more full price items and improving buying margins, but cautioned that the increase would slip to 4 percentage points after the summer sale had finished.

Shares in the company, which has struggled to compete with the supermarkets' push into the children's wear market, have doubled from near five-year lows of 84.5p in January, but yesterday fell 0.5p to 161.5p.

Iain McDonald, an analyst at Numis Securities, said: "Although the recovery remains at an early stage we have been impressed with new management and the progress that has been made to date, and we remain positive."

Meanwhile, Blacks Leisure, which owns the Millets, O'Neill and Blacks Outdoor chains, said like-for-like sales were up by 4.2 per cent in the 19 weeks to 12 July while the gross margin also improved. This was against a 19 per cent surge a year earlier at the end of the foot-and-mouth outbreak, making comparisons more difficult, it added. The news buoyed Blacks' shares, trading at 171.5p in January, which climbed 8.5p to 315p.

The company, also in the hands of a new chief executive, Roy Crosland, said it was on track to open 20 new stores after opening five so far this year. It sold its underperforming sports division, including the First Sport chain, to John David Sports to focus solely on active wear.

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