Mothercare's on City's naughty step in Christmas shocker

The boss of retailer Mothercare on Monday defended his decision to resist discounting in the run-up to Christmas, despite a disastrous profit warning which sent shares diving.

Shares tumbled 27% or 16.47p to 45.52p after the High Street chain said annual profits are expected to be between £1 million and £5 million, below the £10 million anticipated. Sales in Britain were down 11% in the 12 weeks to December 30 as the chain struggled with “lower footfall and spend”.

“We’ve worked very hard to stop [discounting] and we weren’t going to allow what has been a very difficult Christmas trading period to change that,” said chief executive Mark Newton-Jones. “Clearly we could’ve discounted throughout the whole of the period… I fundamentally believe that damages your brand in the long term.”

The seller of baby clothes, car seats and prams is the second High Street brand to issue a stark profit warning after Debenhams last week, which reported poor sales and blamed the hit to profits on a late decision to discount.

Mothercare, which is in the middle of a turnaround plan, warned it was “not anticipating any improvement in the short-term market conditions” at home. However, though the UK is “difficult”, it represents “only a third of turnover,” the chief executive said.