Thursday, May 20, 1999 Published at 11:51 GMT 12:51 UK
Business: The Company File
Storehouse in trouble
Sales at Storehouse were sharply down
Storehouse, the BHS to Mothercare retail group, is cutting 240 jobs and closing 68 smaller Mothercare stores after a sharp fall in sales and profits.
The redundancies, on top of 200 already announced, come after the company announced that profits dropped by 20% in the latest financial year.
Storehouse warned that future earnings would be hit by tough trading conditions on the high street, and the need for further investment in its stores.
Chief executive Keith Edelman said that it was increasingly hard to predict the behavior of customers on the high street.
Trading was "very volatile and there are no clear trends."
Drop in profits
Storehouse profits dropped from £125m to £98m in the year to March.
A slump in children's clothing sales at Mothercare hit the retail chain particularly hard.
Profits at Mothercare - once its most profitable section - were nearly halved from £31m to £18m.
And the company warned that worse was to come.
Sales at Mothercare stores in the past seven weeks fell by a further 6.8% on a like-for-like basis. On a similar basis, BHS sales were down 7.1%.
Weak retail sales
Storehouse said that it was holding its own in a difficult trading environment, with retail sales down 8% in the sector as a whole.
It claimed to have boosted its market share in nursery equipment and women's clothing.
Storehouse shares fell sharply in early trading, losing 11% of their value on the London Stock Market.
Official figures show that retail sales fell by 0.5% in April, with clothing sales showing the biggest drop.
Other clothing retailers, like Marks and Spencer, are also feeling the pinch and have announced redundancies.
But some, like Next, have announced an increase in sales recently, raising hopes that the consumer slump was coming to an end.
"Storehouse has disappointed again, the whole picture looks very different at Next," said one retail analyst.
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