Chief executive Simon Calver, who joined in April (Paris: FR0004037125 - news) to turn Mothercare around, admitted it was “going to be hard work” to return the chain to profitability in the UK, as shoppers were lured away by its rivals' promotional activity over the festive season.
The UK sales slump compared to a 3pc like-for-like decline during the same period last year. However, Mr Calver, who was recruited by Mothercare from LoveFilm, stressed the retailer was still “on track” with its three-year plan to revive the UK business.
He said the company had made a conscious decision this year not to chase unprofitable sales and maintain margins at the expense of volumes.
“What we saw [over Christmas] was lots of competitive pricing activity and we made the decision that cash margin was much more important to restore profitability for us,” Mr Calver said.
Last Christmas Mothercare joined in the aggressive sales and discounting in an effort to keep up with competition from the supermarkets, Amazon and Kiddicare, the brand owned by Morrisons.
Mothercare closed a further 11 stores, including eight Early Learning Centres, during the 13 weeks to January 12, taking its total number of UK shops to 269. It eventually hopes to shrink its high street footprint in the UK to 200 outlets.
Online sales in this country grew 0.9pc during the period after a rush in December offset a lacklustre start to the crucial festive trading period.
Despite the steep sales decline at Mothercare’s UK stores, Mr Calver insisted there was plenty of cause for optimism. International sales grew 12pc during the third quarter, helping the company to post total group sales of 7.4pc for the period.
Mr Calver said new collections were striking a chord with parents, including a range designed by Jools Oliver, the wife of celebrity chef Jamie Oliver, which sold at a rate of one item every minute over Christmas.
Mothercare, which also has a collaboration with Myleene Klass, is continuing to revamp its collections and today launched a range of feeding products, such as bottles and breast pumps, called Innosense.
“We are not chasing unprofitable sales just to hit a like-for-like number, we are being sensible about what we do,” Mr Calver said.
“Mums still like to touch, feel the product and look at it so I think there will always be a role for us to have stores and a national chain. We are the only specialist national chain and we need to stay that way."
But he added: “I recognise it is going to be hard work to make it work.”
In the half year Mothercare cut pre tax losses from £81.4m to £27.4m.