Mothercare posts £66.6 million annual loss, completes store closure plan

Mothercare posts £66.6 million annual loss, completes store closure plan

Mothercare (LON:MTC) posted a £66.6 million pre-tax annual loss for 2018, but insists the completion of its UK store closure programme leaves the business on a “sounder financial footing”.

Founded in 1961, it has been publically listed on the London Stock Exchange since 1971.

The British childcare retailer said on Friday that it had successfully completed its UK store closure programme ahead of schedule. It has reduced its UK estate from 134 stores last year to 79.

Last July, Mothercare was forced to compose a survival plan as its traditional high street position faces challenge by online competitors, forcing it to close a third of its stores in the UK.

In a trading update released in April, the company said that the rate in which its like-for-like sales were declining has improved when compared to the prior two quarters.

Its international business has shown sides of “moderate” recovery. International retail sales were down 0.3% in constant currency and Mothercare said that its core markets in Russia, China and Indonesia had experienced growth.

The retailer said that the next stage of its strategic transformation plan is to develop Mothercare as a global brand. It will simultaneously, however, remain primarily focused with its online proposition in the UK.

“We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business. The majority of that work is now done, including the completion of our store closure programme, leaving us with 79 stores which are well positioned to support our UK customer base,” Mark Newton-Jones, CEO of Mothercare, commented on the results.

“We have also sold Early Learning Centre and our Head Office, and the proceeds have been used to greatly reduce our debt. Combined with a new approach to sourcing product and our organisational restructuring, we have a much reduced cost base,” the CEO continued.

“Whilst this major restructuring activity has resulted in significant headline losses for the year, the business is now on a sounder financial footing.”

At 08:09 BST Friday, shares in Mothercare plc (LON:MTC) were up 21.96%.