Business

Mothercare and Laura Ashley see UK sales fall

  • 31 March 2011
  • From the section Business
Shoppers in Oxford Street, London
Image caption Both Mothercare and Laura Ashley have said they are concerned about consumer confidence

Shares in retailers have come under pressure again after Laura Ashley and Mothercare both reported falling sales in recent weeks.

Laura Ashley said UK like-for-like sales fell 4.2% for the eight weeks to 26 March. Its shares closed down 15%.

Mothercare shares ended 9.5% down after it said UK like-for-like sales slid 2.4% in the first three months of 2011.

The retail sector is preparing for a tough year, with consumers being hit by higher fuel and food prices.

Consumer confidence is also being affected by worries over government spending cuts, analysts say.

The figures from Laura Ashley and Mothercare come a day after electrical goods retailer Dixons issued a profit warning, with underlying sales down 7% in the past 11 weeks.

There was further gloomy news from the latest consumer confidence survey by GfK NOP Social Research.

It found that confidence among UK consumers had "stagnated at depths seldom seen outside of actual recession".

'Significant pressure'

Laura Ashley said it believed that UK consumers were increasingly unwilling to part with their money.

"There has been a decline in performance since the beginning of February, which we attribute to a general weakening in the consumer economy," the company said.

However, its comments came as it reported a healthy rise in annual profits.

For the 12 months to the end of January, its pre-tax profits rose to £24.1m from £11m the year before.

Meanwhile, baby goods firm Mothercare said it expected UK retail profits to remain under "significant pressure" in 2011-12.

It said profit margins were taking a bigger-than-expected hit as difficult conditions forced it to discount stock.

Mothercare's problems in the UK overshadowed its strong performance overseas, where sales from franchises increased 10% in the fourth quarter.

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