Mothercare sales improve amid turnaround 'progress'

Mothercare store Mothercare aims to revive its UK business over the next three years

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Mothercare has said its turnaround strategy is seeing results after reporting a rise in underlying sales.

The firm, which runs 203 Mothercare and 77 Early Learning Centre shops, said like-for-like UK store sales rose 0.3% in the 13 weeks to 13 October, against a 6.7% fall in the first quarter.

Online sales also returned to growth, Mothercare said in trading update.

"Our strategy outlined in May this year is showing early signs of progress," said chief executive Simon Calver.

Mr Calver joined Mothercare in April, from Amazon's LoveFilm division to revive the mother and baby products retailer, with a plan to cut the number of outlets, improve customer service, and expand international growth.

'Good start'

While like-for-like sales rose, total UK sales fell by 6.2% as Mothercare continued with its planned store closure programme. It said it had now shut 31 stores, against a full-year target of about 50.

Mothercare has been hit by competition from supermarkets and online rivals. It made a loss of £25m in its last financial year.

Mr 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."

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said that it appears Mr Calver has "made a good start".

He said: "The decline in same store UK sales has been stemmed, with Mr Calver clearly bringing his internet experience to the group's online offering. Cost savings in the UK are being strongly targeted while international sales continue to expand."

But he warned that the retail market remained tough, and singled out Morrisons supermarket's growing Kiddicare business as an example of how the competition is targeting Mothercare's market.

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