Mothercare’s trading statement for the 13-week period to January 5th 2019 shows a 11.4 per cent decline in like-for-like sales but the business remains on track with its transformation plan to reduce net bank debt.
This decline reflective of a “a combination of the difficult consumer backdrop and the aggressive discounting activity undertaken in the prior year that inflated sales in that period,” it said.
Despite this, Mothercare shows continued strategic progress with its transformation plan to deliver at least £19 million of annualised cost savings. It saw a successful reduction in stock for the end of season sale with stock clearance activity being 23 per cent lower than the previous year.
“Whilst the UK continues to be challenging, in part as a result of our planned restructuring, we are still on course to deliver the necessary transformation,” said Mothercare plc chief executive officer Mark Newton-Jones. “Our UK store closure programme continues apace and is ahead of schedule, with 36 stores currently transitioning for closure, meaning we will have a total UK estate of 79 stores by the end of March 2019.”
“Crucially, the Group continues to be disciplined in its management of cash and is progressively reducing its net bank debt. We recently completed the sale and leaseback of our UK head office and have created a leaner organisational structure. Together with other improvements, this has allowed us to reduce the levels of debt in the business, supporting our aspiration to be bank debt free by the end of 2019.”
Mothercare’s full-year profit guidance remains unchanged.