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Mothercare FY'19 sales dip amid restructuring


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Mothercare FY'19 sales dip amid restructuring

British retailer Mothercare PLC said May 24 that its full-year 2019 total group performance remained on track with its previous guidance despite a 7.1% drop in total group sales.

For the 53 weeks ended March 30, like-for-like sales in the U.K went down 8.9%, while online sales declined 8% to £140.1 million, compared to £152 million from 2018. Total U.K. sales slid 11.8% year over year to £337 million, compared to £382 million from the year prior. Mothercare attributed its drop in domestic sales to diminishing footfall and online traffic, supplier restrictions on stock availability, negative publicity and reduced pricing due to store closures.

Total international sales dropped 4.3% to £611 million, compared to £639 million from last year.

The company also reported a significant reduction in net debt to £6.9 million, owing to the sales of its Early Learning Centre and head office.

However, the company's total group loss before taxation rose about 20% year over year to £87.3 million, compared to £72.8 million in 2018.

Meanwhile, CEO Mark Newton-Jones announced the separation of the company's Global Brand division from Mothercare U.K. in order to create an array of products that are suited for foreign markets. Jones said it is in contrast with the previous practice of designing products for the U.K. first and then adjusting them for the warmer overseas climates the company trades in.

The company also said that it has exceeded its target cost saving of at least £19 million per annum with an annualized total operating cost savings of over £25 million through rent reductions, store costs, central overheads and global rightsizing of the business.