Mothercare share prise rises as retailer hails first underlying UK sales growth in five years
Shares in Mothercare rose 4.6 per cent yesterday as turnaround efforts under chief executive Mark Newton-Jones continued to pay off, with the retailer reporting its first full-year sales growth in five years.
The child and baby products chain has had a tumultous year, in which it had to fend off a takeover offer from a US rival and turn to shareholders to raise £100m via a rights issue to help pay down debt and fund a turnaround.
Former Shop Direct chief executive Newton-Jones has closed stores, introduced new products more frequently to stores in the style of “fast fashion” retailers such as Zara-owner Inditex – and cut back on discounting to help stem the decline in margins.
“It’s still very early days but we are pleased [with the result]”, he said. Underlying profit before tax surged by 37 per cent to £13m in the year to 28 March,
Total UK sales fell 0.9 per cent to £458m as it shut 31 loss-making UK stores. However, like-for-like sales rose by two per cent.