(Updates with closing share price in sixth paragraph)
Nov. 17 (Bloomberg) -- Mothercare Plc, the children’s clothing retailer whose shares plunged the most in 23 years last month on its worsened U.K. outlook, said it expects tough economic conditions in its home market to continue through the Christmas holiday season.
“The challenging conditions in the U.K. will remain,” Executive Chairman Alan Parker said during a conference call today. “It is difficult to see how that position will change.”
The company, which said in March it will cut its U.K. stores to 266 by March 2013, said today the U.K. business is being reviewed to decide the “right size and shape” and overhead costs in that market. It had 352 stores in the U.K. and 975 stores overseas at the end of the first half.
U.K. consumer confidence dropped to a record low in October as Europe’s sovereign debt crisis and the domestic unemployment outlook worsened, the Nationwide Building Society said today. Mothercare, which plans to open 150 stores this year outside the U.K. in markets including China, Australia and Latin America, said trading had become “increasingly difficult” in the domestic market.
“We’re expecting a competitive and promotional Christmas,” Finance Director Neil Harrington said in the conference call. The first-half net loss was 75.2 million pounds ($118 million), compared with a net income of 6.5 million pounds a year earlier, the Watford-England based company said in a statement today.
Shares fell 18 percent, or 27.7 pence, to close at 127.3 pence in London trading, giving the company a market value of 112.8 million pounds.
Mothercare, whose Chief Executive Officer Ben Gordon quit last month after the company said the second-half outlook had “materially worsened” in the U.K., said it is reviewing a candidate list to replace Gordon.
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