Mothercare became the latest victim to suffer from the heavy discounting that plagued the High Street this Christmas, as the company issued a shock profit warning which sent shares crashing more than 30 per cent.
Chief executive Simon Calver admitted profits will miss targets after sales in the UK fell 9.9 per cent over the 12 weeks to January 4 compared with a year earlier.
He blamed heavy discounting for the fall and said lessons would be learned from the decision to offer 50 per cent discounts just days before Christmas.
He said: “Hindsight is always an interesting test. There was a late rush and that was compounded with a soft autumn period. We didn’t want to be in a position where we had too much stock in stores, and we had to remain competitive.”
The department store chain Debenhams suffered a similar fate last week when it too issued a profit warning, blaming in part heavy discounting.
Calver said the number of customers coming through the doors had been lower than expected, although website sales did pick up by around 20 per cent compared with a year ago.
Toy sales were also down, especially through its Early Learning Centre website, after a free delivery offer was scrapped.
It is not known how today’s warning, which will see profits hit £8 million compared with an expected £13.5 million, will affect plans for a turnaround or store closures. But investors piled out, as shares hit a nine-month low.Reuse content