Spreadex Market Update
Mothercare joins Debenhams on the scrap heap as online sales slide
"It really does seem as if 2018 is going to be a race to the bottom between Debenhams, Mothercare and any other bricks and mortar retailer that hasn’t already successfully pivoted online."
Micro Focus actually posted some attention-grabbing numbers, namely a 28.7% surge in revenue to $145.7 million and an 80.3% jump in revenue to $1.23 billion. Yet the fact that revenue dropped 2.9% year-on-year to $664.7 million when the effects of its HPE Software merger were stripped out, alongside its group results coming in at the bottom end of expectations, soured investors on the tech firm, who sent the stock to a 4 month low.
Though the brunt of the week’s retail news comes from Tuesday onwards, investors did get a bleak sector preview in the form of Mothercare’s latest results. Very much in the Debenhams, rather than Next, school of post-Christmas updates, the baby specialist unveiled an ugly 7.2% plunge in like-for-like sales, with an especially ominous 6.9% drop in online sales. This inevitably led the firm to issue a profit warning, with expectations for the full year now standing between £1 million and £5 million against the £10 million estimated by analysts, news that caused the stock to haemorrhage nearly 26% in value. It really does seem as if 2018 is going to be a race to the bottom between Debenhams, Mothercare and any other bricks and mortar retailer that hasn’t already successfully pivoted online.
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