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Losses widen at Mothercare as sales slide

Losses widen at Mothercare as sales slide
FILE PHOTO: People walk past a Mothercare store in Altricham, Britain, May 16, 2018. REUTERS/Andrew Yates   -   Copyright  ANDREW YATES(Reuters)
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LONDON (Reuters) – Struggling British baby products retailer Mothercare <MTC.L> warned trading would remain volatile as it reported a wider first-half loss, reflecting another slump in underlying sales in its home market.

Mothercare’s sales and profit have been hammered by intense competition from supermarket groups and online retailers in its main British market as well as by rising costs. Its shares have lost three quarters of their value over the last year.

The firm has refinanced, is closing over a third of its UK stores and is slashing costs as part of a survival plan.

It said on Thursday it made an adjusted pretax loss of 6.2 million pounds ($7.93 million) in the 28 weeks to Oct.6, versus a loss of 2.6 million pounds in the same period last year.

Mothercare’s UK like-for-like sales fell 11.1 percent which it blamed on wider market uncertainty and negative brand coverage in connection with its refinancing.

“The UK retail environment…remains very challenging,” said Chief Executive Mark Newton-Jones. But he said he was confident Mothercare’s strategy would ultimately reinvigorate the business.

Mothercare shares closed Wednesday at 18 pence, valuing the firm’s equity at just 60 million pounds.

(Reporting by James Davey; editing by Sarah Young)

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