Mothercare posted a first half loss compared to a profit a year earlier and while the International business goes from strength to strength, it expects the UK consumer environment to remain difficult through the key Christmas period.
The Watford based babycare retailer also announced a structural and operational review of its planned UK business size and shape.
The review will consider the number, format and location of retail outlets and the plan for e-commerce and will also include the right-sizing of its overheads to fit the new operating base. The review will include the Christmas trading period and will be completed in the first quarter with implementation in 2012/13, it said.
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Mothercare recorded a loss before tax of £81.4m in the first half compared with a pre-tax profit of £0.3m last year. Group sales rose to £412.9m from £397.1m a year before.
Chairman Alan Parker noted the group's difficult first half. "Whilst the International business continues to perform strongly our performance in the UK illustrates the extent of the challenges facing the business in a weak economic and consumer environment."
Total international sales increased by 14.9% to £342.8m, driven mostly by International retail sales, which rose by 15.7% in the first half to £338.3m.
In the first half 81 new overseas stores were opened, taking the total to 975 in 55 countries. It opened its first stores opened in Latin America and signed a new joint venture in Ukraine.
Mothercare said it is confident about the outlook for the international business which its expects to continue to grow sales by 15-20% per annum, opening 150 stores each year.
In the medium term in the UK the Board expects a return to profitability after its property reduction announced earlier this year as well as the operational and management changes it is currently implementing.
Parker added that he is confident of returning Mothercare to a profitable and sustainable business in the UK over time.
Net debt swelled to £24.6m from £8.6m in 2010. It has a total credit facility of £90.0m.
The interim dividend has been reduced to 2p from 6.4p last year.
Mothercare said its search for a new CEO is proceeding on plan.
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