Baby and child product specialist Mothercare has ditched its chief executive, announcing it will remain in the red after sales fell during the late spring and early summer, sending its shares lower.
Mothercare, which had already forecast a loss for its first quarter to June 21st, said today it now expected the rest of its first half would be loss making after like-for-like sales fell 3.1 per cent in the 14 weeks to July 12th.
The company specialises in clothing, furniture and accessories for new-born babies and young children.
With gross margins also down 0.5 per cent in the period, chief executive Mr Chris Martin is leaving the company immediately, Mothercare said, adding that Finance Director Mr Mark McMenemy would add his responsibilities until an appointment is made.
At 8.15 a.m, Mothercare shares were 16 per cent lower at 130 pence, valuing the business at £92 million.
The company said an expected improvement in clothing sales, particularly in its high street stores, had not materialised.
British retailers have had a poor run recently, with a combination of bad weather, football's World Cup and the royal Jubilee holiday keeping people out of shops.
On July 3rd, the Confederation of British Industry said retail sales growth slumped to an 18-month low in June.
Mothercare said distribution costs were continuing to fall and "availability of the new autumn ranges will be much improved on last year". Last November, Mothercare issued a profit warning after suffering teething problems at a new warehouse that led to stock shortages in its stores.
Based on Friday's close at 155p, Mothercare shares had underperformed the general retailing sector by 18 per cent this year.
PA