* Mothercare looking to capitalise on imminent birth
* Q1 UK underlying sales down 0.9 pct
* Q1 international retail sales up 11.1 pct
* Shares fall up to 7 pct
By James Davey
LONDON, July 18 British mother and baby products
retailer Mothercare is hoping the imminent birth of the
nation's heir to the throne will provide a fillip to the
business after it reported a drop in sales in its home market in
the latest quarter.
Many retailers are finding the going tough as consumers,
whose spending generates about two-thirds of British gross
domestic product, fret over job security and a squeeze on
Mothercare has been particularly hard hit because it faces
intense competition from supermarkets and internet players.
The firm, which operates in 60 countries, said on Thursday
sales at British stores open over a year fell 0.9 percent in the
15 weeks to July 13, its fiscal first quarter, compared with the
same period last year, sending its shares down up to 7 percent.
However Chief Executive Simon Calver, in the second year of
a three-year turnaround plan aimed at revitalising its
loss-making British business, said the firm was well placed to
capitalise on the arrival of Prince William and his wife Kate's
first child, due any day.
He said Mothercare had put together a celebration range that
included "Born to Rule" sleepsuits and "Princess/Prince in
Training" bibs and vests, while the flagship Oxford Street store
in central London would be transformed to mark the occasion.
"It's hard to gauge what sort of increase we have. I think
they'll be a feelgood factor and who knows in nine months time
there may even be a tick-up in the birth rate," Calver said.
The company's performance in the latest quarter compares
with a weak outcome in the same quarter last year when
like-for-like sales slumped 6.7 percent.
ONLINE SALES UP
Though analysts had forecast growth of up to 2 percent,
Calver said the outcome was consistent with his expectations for
the full 2013-14 year of a 1-2 percent fall in UK like-for-like
sales and a possible return to growth in the following year.
While clothing sales and volumes benefited from the launch
of new ranges, especially a new value range in July last year,
toys and home & travel in particular were hit by an increasingly
promotional market, Mothercare said.
The first quarter outcome would have been worse were it not
for a 14.6 percent rise in online sales.
Mothercare is improving product ranges and delivery
services. British stores are also being revamped and
unprofitable ones closed - 56 were closed in 2012-13 and 13 in
the first quarter of 2013-14, taking the UK total to 242.
The group's overseas arm has been more fruitful, with
international retail sales up 11.3 percent in constant currency.
It opened a net 47 stores overseas during the quarter,
taking the total to 1,116 abroad.
Shares in Mothercare, which have more than doubled over the
last year, were down 32.5 pence at 439 pence at 0938 GMT,
valuing the business at 391 million pounds.
"We view 2013-2014 (profit) as being fully underpinned by
store closures, with limited forecast risk. However, with the
market already factoring in a further doubling of earnings in
2014-15 the shares look up with events," said Peel Hunt analyst