Mothercare shows ‘early signs of progress’ as online sales return to growth

Mothercare’s online sales have returned to growth as the nursery retailer hailed “early signs of progress” in its UK turnaround plan. But any green shoots came as sales continued to fall in the first half across the wider group, its first-half trading statement showed.

Sales in Mothercare’s Direct in Home ecommerce division grew by 11% in the second quarter of its financial year, taking half-year growth to 0.9%, the statement showed. The company said the upturn followed a move to a new online platform.

However across the group, sales remained in negative territory. Total group sales fell by 5.9% in the half-year, and by 7.5% in the second quarter. UK sales fell by 8.3% in the half year following the closure of 31 stores, a move that took the UK estate to 280 stores, including 77 ELC stores. Like-for-like sales fell by 3.4% over the period but grew by 0.3% in the second quarter.

Mothercare is now months into a turnaround plan that aims to reverse a trend of falling sales in the UK business, both online and off. In April it said it would do that through closing unprofitable stores, focusing on improving the store experience in those remaining, and launch a new ecommerce website – now achieved. It also said it would continue to open international stores.

This week chief executive Simon Calver welcomed the first signs that the strategy was succceeding, with second quarter growth both in online and like-for-like UK sales.

“Our strategy outlined in May this year is showing early signs of progress,” he said. “In the UK, we have put the customer back at the heart of what we do. This is already beginning to have a beneficial impact on like-for-like sales, which along with our online business have returned to growth.”

The company now has 1,098 international stores, following 70 openings in the first half. International sales rose by 10.8%, and were particularly strong in the Asia Pacific, Middle East and Africa.

Calver said: “We recognise that our most important quarter which includes Christmas is still ahead of us. We are confident about delivering against the targets we set out in our three-year plan.”