Mothercare deeper in the red as sales slump

p56 p57 A pregnant shopper at Mothercare, where Christmas sales fell. A woman inside a Mothercare store. The under-pressure retailer today announced another drop in UK sales as it continues to flounder at home but flourish abroad. File photo dated 31/3/11. PRESS ASSOCIATION Photo. Issue date: Thursday January 12, 2012. The mothers-to-be, babies and children's goods group, which runs around 350 stores in the UK, said that like-for-like sales in its domestic market were down by 3% in the 13 weeks to January 7. See PA story CITY Mothercare. Photo credit should read: Martin Rickett/PA Wire. (Picture: Martin Rickett/PA)

The strife at Mothercare deepened on Friday when it revealed that sales plunged 9% last year and losses rose.

Chief executive Mark Newton-Jones, who left but was asked to return a month later, believes he can rebuild the business as a “global brand” as “it is now on a sounder financial footing”.

He has slashed debts from £44 million to £6.9 million.

But losses increased from £73 million to £87 million. It has entered a company voluntary arrangement, closed a third of its stores and is trying to grow online.

Interim executive chairman Clive Whiley said shareholders deserved to be told “what went wrong” as cash-flow problems were “further fuelled by a fracture in the relationship between the non-executive and operating executives, a breakdown in trust with key shareholders and the appointment of an array of increasingly expensive professional advisers”.