Rise in online sales brings Mothercare some much-needed relief
PUBLISHED: 08:40 12 April 2018 | UPDATED: 08:40 12 April 2018
Archant Norfolk 2015
Beleaguered Mothercare has cheered a much-needed resurgence in online sales as the struggling retailer remains locked in talks with lenders over a refinancing deal.
Online sales returned to growth in the UK, expanding by 2.1% in the 12 weeks to March 24 this year.
However, trading on the British high street proved tough, with like-for-like sales sliding 2.8% over the period as store footfall tumbled.
The company operates stores in Norwich, King’s Lynn and Ipswich.
International sales were also down 3.7% as growth in the Middle East failed to offset sliding footfall in Russia.
The update comes a week since Mothercare parted company with chief executive Mark Newton-Jones, replacing him with former Tesco man David Wood.
The group has been seeking a reprieve from the demands of its lenders by drafting in KPMG to advise on a refinancing of the firm.
It called in the accountancy giant to help it secure waivers to its financial covenants as it looks at additional sources of financing from its lenders HSBC and Barclays.
Mr Wood said his “immediate priority” was to ensure Mothercare was returned to firmer financial ground.
He said: “The UK retail trading environment remained relatively muted in the quarter, with a continuing trend of lower footfall in stores, though there was an encouraging return to growth online, with website sales in particular growing at 7.2%.
“My immediate priority is to ensure Mothercare is put back on a sound financial footing and to improve its financial performance.
“We continue to make good progress in reducing the size of our UK store estate in response to changing consumer preferences and in reducing our central cost base, but our central focus must be customers and their experience, securing Mothercare’s reputation as the number one specialist for parents.
“We remain in constructive dialogue with our financing partners with respect to our financing needs for FY19 and beyond, and we continue to explore additional sources of financing to support and maintain the momentum of our transformation programme.
“All of these discussions are on-going and further updates will be given as appropriate.”