Warehouse revamp contributes to difficult trading at Mothercare
25 November 2016
The retailer saw sales drop in the six months to October 8, 2016, with its underlying loss rising from £6.1 million to £8.8m.
One of the reasons for the dip was the retailer changing its warehouse infrastructure.
Mark Newton-Jones, chief executive of Mothercare, said: “While our planned warehouse infrastructure change has been successfully completed, it did mean a reduced flow of product for 8 weeks in the summer and a one off increase in operational costs as the systems bedded in.”
Mothercare said this, along with unseasonal weather through the spring/summer season, was to blame for falling margins.
Newton-Jones remained upbeat about the retailer’s future.
“We are now in the second year of the turnaround of Mothercare, and we are continuing to make major changes in the business,” he said.
“We have refurbished around 60% of our UK store estate, upgraded our distribution and online capabilities and completed the bulk of the unprofitable store closure programme. Lastly we have seen a step change in our digital credentials with around 40% of our business now being generated through this channel.”