Embattled retailer Mothercare has reported an 8.8% drop in like-for-like sales for the 12 week period to 30 March 2019.
Despite the decline, it represents an improvement on the prior two quarters, and was driven by clearance stock volumes in closure stores which diluted gross margins but cleared all inventory in these stores.
According to the retailer, the clearance activity has “significantly impacted” online full price sales as volumes switched to closing stores. International retail sales were also down 4.9% in constant currency, and down 4.5% in actual currency.
Additionally, Mothercare “successfully” completed its UK store closure programme ahead of schedule, closing 40 stores in the past three months. Its UK portfolio now sits at 80 stores, down from 137 in the prior year, representing a reduction in space of 30%.
CEO Mark Newton-Jones said: “We have continued to make significant progress in our final quarter as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare. The UK store closure programme has been completed ahead of schedule and we now have 80 stores in operation, down from 137 stores a year ago.
“Whilst this has been a difficult but necessary process, to right-size the UK, it has meant that we have had to say goodbye to many loyal and longstanding colleagues. Their approach and professionalism have been outstanding right until the last day of operation for which we thank them sincerely.”
He added: “The disruption we have seen from both the organisational changes and the UK store closures is now largely behind us. We expect a continued impact on our business given the volume of clearance stock we have sold in recent months. Against this background, we remain on track to deliver on our full year expectations.”