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Mothercare reports online growth, but wider UK sales still down despite baby boom

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Mothercare today reported strong online sales – but saw a significant fall in its overall UK sales.

The nursery retailer today unveiled growth of 8.3% in its online Direct in Home business in the second quarter of its financial year, taking online sales for the first half of the year to 11.6%.

But while Mothercare moved ahead online – perhaps driven by the ongoing baby boom, its UK like-for-like sales fell by 1.9% and its total UK sales fell by 6.9% as the company continued to resize its estate in the light of the internet effect, reducing its store network by 6%.

Chief executive Simon Calver said: “UK Direct delivered another quarter of growth and we expect further multichannel progress as we continue to improve our service for customers with next day click-and-collect extended to all UK Early Learning Centre stores in time for Christmas trading.

“In line with the transformation and growth plan, we are continuing to make fundamental improvements to our business in the UK, which will allow us to compete effectively in a changing marketplace.”

International growth of 12.6% helped to take total group sales to a drop in sales of 0.5%. Worldwide network sales were 3.9% up on the same time last year.

Our view: We may be going through the biggest baby boom in 40 years, but Mothercare, which should be catering to a growing market, still looks as if it’s failing to thrive. Simon Calver promises that the company is changing to compete in a “changing marketplace” – but progress in changing its reputation is slow in a world in which the competition has grown enormously in recent years. Much of that competition, of course, had its origins online, rather than moving towards online as Mothercare has had to.

All that said, Mothercare is clearly starting to make an impact in its online offering, as evidenced by the growth in online audience. Its mobile app, as demonstrated at the recent Demandware Xchange, is a strong offering that is very relevant for its target audience. We’ll wait with interest to see what comes next.

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