Comment: Mothercare's challenges and successes in Q1

Baby care specialist Mothercare has reported a reasonable set of results for its Q1 trading, with UK sales declining by 2.1%, impacted by a reduction of store space. UK like-for-like sales were up by 1.2%, although this represents a slight slowdown on growth, reflecting an unsuccessful battle against unseasonable weather conditions.

As Mothercare continues to focus on its turnaround, it must establish a loyal customer base, appealing to all ages through social media engagement and exemplary customer service. As part of this turnaround, Mothercare continued its refurbishment of stores this quarter, with this a key component of its modernisation plan to improve the customer shopping experience, and ultimately entice young mothers back to its stores.

Mothercare is also working to improve its online proposition as part of its aim of becoming a 'digitally led business'.

Over the quarter, online sales grew by 6.4%, while mobile now represents 84% of online traffic. Innovation of its app is proving to be highly successful, with additions to differentiate it from the mobile site, such as Baby Tunes (songs and white noise for babies), helping to create a more interactive experience.

International exposure remains volatile, although sales were strengthened this quarter by the timing of Ramadan, which fell entirely in Q1 this year. In spite of this impressive growth, Mothercare must remain cautious in light of the UK’s decision to leave the EU, with this development likely to impact trading globally.

Hedging in both the dollar and royalty receipts should limit the impact on the weakening of the pound, allowing Mothercare to see further sustained growth this financial year.

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Verdict Retail