Mothercare dives as it swings to a half-year loss

Mothercare (LON: MTC) has announced its H1 18 Interims today which highlight the tough consumer market conditions currently faced by retailers.

Group Revenues were down almost 2% to £399m as Profits slipped to a Loss Before Tax of £0.7m, down from the £5.9m Profit Before Tax in H1 17.

Despite UK sales growing slightly, international markets including the Middle East continue to underperform.

Shares in Mothercare slipped over 16% in Thursday morning trading, continuing its downward trajectory as investors remain wary of the Group's future.

Ten underperforming stores were closed in the first half of FY18 with just one new store opened during the period.

Management says the Group is in the midst of a transformation to a "digitally led" business with 42% of Group sales now made online.

Mark Newton-Jones, Chief Executive of Mothercare plc, commented:

"Towards the end of the reporting period, and in subsequent weeks, we have seen a softening in the UK market with lower footfall and spend which is consistent with recent industry reports. Not-withstanding this uncertain consumer backdrop, the Mothercare brand, whilst not immune, is in a stronger position with a much-improved product and service offer."

In response to the changes in consumer spending habits the Group is adjusting its business model to include a larger online presence, a lessening of brick and mortar stores and a shift in its retail presence to become more of a mothers "club". This includes a number of in-store services including car seat fitting and meet-ups.

To find out more about how retail has changed forever, check out our article "The shifting High Street vol. 1: retailers" where we take a look at how businesses are adapting to the rise of online shopping and creating more in-store "experiences" to entice shoppers through the door.

MTC's share price has been falling since it peaked mid-2015 at 295p and trades at 70p after today's price drop. This represents a fall of 320% in 30 months.