British mother and baby products retailer Mothercare returned to an underlying sales fall in its home market in its latest quarter as the trading environment became increasingly promotional.
The company, which operates in 60 countries including Ireland, said sales at British stores open over a year fell 0.9% in the 15 weeks to 13 July, its fiscal first quarter.
That compares with a flat like-for-like sales outcome in the fourth quarter of the 2012-13 year and with a very weak outcome in the same quarter last year when like-for-like sales slumped 6.7%.
The first quarter outcome would have been worse were it not for a 14.6% rise in online sales.
"Whilst clothing sales and volumes have benefited from the launch of new ranges, especially the Value Essentials range in July last year, toys and home & travel in particular have been impacted by the increasingly promotional nature of the market," Mothercare said.
Led by Chief Executive Simon Calver, Mothercare is in the second year of a three year turnaround plan aimed at revitalising a loss-making British business worth 40% of group sales that has lost ground to rising competition from both supermarkets and online players.
The group is improving product ranges and delivery services. British stores are also being revamped and unprofitable ones closed - 56 were closed in 2012-13 and 13 in the first quarter of 2013-14, taking the British total to 242.
Total Britisn sales fell 7.9%.
While Britain's retailers continue to find the going tough at a time when consumers' disposable incomes remain stretched, Mothercare's overseas arm has been more fruitful, with international retail sales up 11.3% in constant currency.
The group opened a net 47 stores overseas during the quarter, taking the total to 1,116.
"Trading conditions have been challenging both in the UK and across our Eurozone markets and are expected to remain so for the rest of the year," the firm added.
Shares in Mothercare, which have more than doubled over the last year, closed yesterday at 473.5p, valuing the business at £420 million.
