This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-25649283
The article has changed 7 times. There is an RSS feed of changes available.
Version 1 | Version 2 |
---|---|
Mothercare share price falls 31% after profit warning | |
(35 minutes later) | |
Shares in Mothercare have fallen 31% following a profit warning as a result of Christmas discounting in the UK and weak economic conditions overseas. | |
Total worldwide group sales fell 6.1% in the 12 weeks to 4 January, with UK like-for-like sales down 4%. | Total worldwide group sales fell 6.1% in the 12 weeks to 4 January, with UK like-for-like sales down 4%. |
Chief executive Simon Calver said "difficult" trading conditions in the UK and volatile international markets had been behind the sales fall. | |
In the UK, weaker footfall and price cutting hit sales and margins. | |
Mr Calver said the retailer's full year profits were "likely to be below the current range of market expectations". | Mr Calver said the retailer's full year profits were "likely to be below the current range of market expectations". |
He said Mothercare's international markets had also been hit by deflation. | He said Mothercare's international markets had also been hit by deflation. |
"In some of our larger markets such as Russia and the Middle East we have also experienced some unseasonal weather which impacted sales," he added. | "In some of our larger markets such as Russia and the Middle East we have also experienced some unseasonal weather which impacted sales," he added. |
UK restructuring plan | |
Ishaq Siddiqi, market strategist at ETX Capital, said the company's online services had also suffered a "big drop" after it decided not to repeat last year's free delivery offer. | |
He said the move was a "bad call" by Mothercare. | |
Mr Siddiqi added: "Management now have to figure out a turnaround strategy or face the real likelihood of a fate similar to that of Comet and Woolworths." | |
Mothercare has branches in 60 countries but has recently shut 63 in the UK as part of its restructuring programme. | Mothercare has branches in 60 countries but has recently shut 63 in the UK as part of its restructuring programme. |
In November last year the company posted a £2m underlying profit for its half-year results and said its restructuring plan was beginning to work. |