Direct in Home, Mothercare’s web-based home delivery service, saw growth of 18.2 percent in the 11 weeks of trading to March 30, according to the retailer's fourth quarter results. "If there's one clear message that Mothercare should take from this, it's that online is a potential saviour. Robust Direct in Home sales should show the retailer the way forward,” James McGregor, director of the retail consultants Retail Remedy affirms in a note issued Thursday. Currently 12 months into a three-year restructuring plan, Mothercare reported like-for-like sales over the winter trading period, compared to a six percent decline in the previous quarter. Total UK sales fell 5.1 percent with group sales declining by 4.8 percent, but underlying pre-tax profit was described by the retailer as “in line with market expectations”. On the wake of the news, McGregor pointed out that "It's been a messy few years for Mothercare and while these figures are bad, they're not as bad as they could have been. Results not as bad as expectedUK like-for-like sales were flat in the fourth quarter—an improvement on last year when sales for the period dropped. Meanwhile, direct sales boosted the company’s performance as rose 18.2 percent in the fourth quarter. "Flat UK like-for-like sales in the fourth quarter will have given the retailer a glimmer of hope. That's how bad things have been, McGregor summed up, reminding however that "Mothercare is only in year one of a three-year turnaround plan so investors will cut it some slack. What it somehow needs to do is start generating the enthusiasm for the brand that surrounds it abroad.” Mothercare chief executive Simon Calver highlighted that international sales surged 15.5 percent and the group’s full-year results should meet market expectations. Cantor Fitzgerald retail analyst Kate Calvert said the broker has pencilled in a pre-tax profit of 8 million pounds, but she said the chain faces “fierce” competition from supermarkets and online rivals. The news got some analysts’ support for the retailer’s stock, with Numis Securities Ltd restating their “buy” rating in a research report issued to clients and investors on Thursday, Analyst Ratings.Net reports. They currently have a 250 pence price target on the stock. Mothercare’s shares were up 20.5 pence, or 7 percent, at 312.5p following the trading update. Source: Fashion-news
