Slide in sales wipes 31 per cent off Mothercare

Mothercare suffered a humiliating setback to its plans for a turnaround in its UK business as the baby and childrenswear business issued a shock profit warning.

Its directors admitted sales in the run up to Christmas had been poor with fewer customers coming through its doors, disappointing online sales and heavy discounting affecting the bottom line.

The news sent shares in the retailer plummeting 31 per cent to 291.5p as investors who had previously given the chief executive Simon Calver the benefit of the doubt over his plans for rebuilding the company appeared to desert him. Sales in the UK for the 12 weeks to 4 January fell 9.9 per cent, or 4 per cent on a like-for-like basis, compared with the same period a year ago. Total group sales fell 6.1 per cent and pre-tax profits will hit around £8m instead of an expected £13.5m.

Mr Calver said lessons would be learned from the decision to offer 50 per cent discounts just days before Christmas, but said it was difficult to not follow competitors in offering lower prices.

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. We had to remain competitive." The department store group Debenhams suffered a similar fate last week when it too issued a profit warning, blaming, in part, heavy discounting for the fall in profits.

In Debenhams' case, however, its chief executive Michael Sharp defended his decision to offer discounts in the run-up to Christmas, calling it a "strength" of the company. At Mothercare, toy sales were also dented, especially on it's Early Learning Centre website after the scrapping of free postage on orders last year.

Mr Calver said it was the right decision to end the free delivery for any order under £50 and said in the long run it was more profitable. He said: "Last year people were ordering £3 pots of paint, so it was costing us £5 in delivery charges and wasn't economically viable." He said it was too early to say what kind of impact yesterday's profit warning would have on his strategy to make the UK profitable again, or if it would speed up the store closure programme.

Its international business also suffered during the period, with currency deflation hitting its numbers, and a slowdown in growth in countries where there has been economic volatility. Two of its biggest regions, Russia and the Middle East, also suffered due to unseasonable weather.

He admitted the warning would do nothing to change perceptions of the Mothercare brand as over-priced and dowdy.

Start your day with The Independent, sign up for daily news emails
Sport
Super BowlAfter Katy Perry madness it's back to The Independent's live coverage of Super Bowl 49!
News
See what Twitter had to say about the first half of the Super Bowl
News
people
News
people
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

The super-rich now live in their own Elysium - they breathe better air, and eat better food, when they're not making beans on toast for their kids

The super-rich now live in their own Elysium

They breathe better air, eat better food, take better medicine
A generation of dropouts failed by colleges

Dropout generation failed by colleges

£800m a year wasted on students who quit courses before they graduate
Entering civilian life 'can be like going into the jungle' for returning soldiers

Homeless Veterans appeal

Entering civilian life can be like going into the jungle
Sam Taylor-Johnson: Woman on top

Sam Taylor-Johnson: Woman on top

Fifty Shades of Grey director on bringing the hit to the screen
Shazam! Story of the $1bn 'what's that song?' app

Shazam: Story of the $1bn 'what's that song?' app

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch