Mothercare shares slide 12% on stock fears

Shares in Mothercare slumped 12 per cent after the maternity and baby products retailer admitted yesterday it has uncovered yet another glitch at its warehouse in Daventry, Northamptonshire.

Mothercare, which parted company with its chief executive last month after a profits warning, said the site was unable to cope as excessive stock flooded in, pushing it past capacity and forcing the company to suspend orders. A spokeswoman said Mothercare "needed to reduce on a temporary basis the amount of stock coming in to the warehouse from some suppliers". The problem came to light as the retailer was preparing for next week's launch in its stores of the new autumn/winter range. Fears that the stock imbalance could hurt sales sent its shares sliding 14.5p to 105p.

The year-old warehouse, which is managed by Tibbett & Britten, is expected to return to normal operations early next week and Mothercare insists the range launch will not be affected as stock is still being delivered as normal to the stores.

"This is not going to jeopardise the launch," the spokeswoman said, adding that products from the new range are already in the stores.

News of the logistical hiccup came just three weeks after Mothercare said its warehouses were performing normally following stock shortages that hit sales. Problems at Daventry late last year badly damaged sales over the crucial Christmas selling period and knocked annual profits down to just £0.1m in the year to March.

The latest woes have also raised questions over the management of the group. Chris Martin quit as chief executive after the company warned it would make a loss in the first half and his temporary replacement, Mark McMenemy, who stepped up from finance director, is currently on holiday.

The company denied it was suffering from a management vacuum while looking for a replacement for Mr Martin.