It added that autumn/winter stocks had been substantially cleared in the sale and remnants would be sold

It added that autumn/winter stocks had been substantially cleared in the sale and remnants would be sold through the clearance stores.Mothercare, which in addition to internal problems has suffered from increased competition as major supermarket chains muscle in on the childrenswear market, said group sales rose by 1.6 per cent in the 13-week period. They have massive opportunities to grow but are not getting basic in-store principles right.” Mothercare reported revenues of more than £400m last year.The decline in like-for-like sales came after a 4 per cent fall over the Christmas period in 2002. This could include selling off some of the group’s down-at-heel high street stores, analysts said.Richard Ratner, at Seymour Pierce, said the figures were “horrendous”, adding: “They’ve got a good name and that’s where it ends.” Pete Mackinnon, at Numis Securities, said: “It just amazes me. Its shares hit a fresh 12-month low, falling 14p to 86.5p.Analysts said the warning was likely to reignite takeover interest. They slashed their full-year expectations for the group, forecasting losses of £12m, down from about £4m. Shares in Mothercare slumped 14 per cent after the struggling baby goods retailer issued its fourth profits warning in less than a year.
The group, which was forced to shake up its management team, said underlying sales fell 1.1 per cent in the 13 weeks to 10 January.

Jacqueline Gold, the chief executive, said sales of its lingerie and naughty novelties tended to prosper when the economic outlook worsened.. Gift sales were strong, with the George Foreman grill and the “Hot Diamond” range of jewellery proving a particular hit, it said.Elsewhere, Ann Summers, the privately owned chain of sex shops, said underlying sales had risen by 22 per cent. Mr Sunnucks said he expected consumer spending in 2003 to slow to between 2 and 4 per cent, down from nearer 6 per cent in 2002.Debenhams said the wet weather in November made trading very difficult but that sales accelerated throughout December. The last five weeks to 11 January were “considerably better” than the 2.8 per cent rise across the 19-week period, the group said.

Matthew McEachran, at Investec Securities, said: “Profit expectations are not being raised as hoped.”Echoing other retailers, Deborah Earle, Debenhams’ chief executive, said she remained “cautious about the economic outlook for the UK consumer”. But it said gross margins fell by 1.3 per cent, reflecting the post-Christmas surge in sales.Stephen Sunnucks, the chief executive, said: “The two weeks prior to Christmas were below expectations, which meant slightly more stock going into the sales.” He said the group planned to sacrifice about 50 basis points of its gross margin to keep its prices competitive but that its programme to slash costs meant its operating margin would be flat.Analysts said the fall in New Look’s share price reflected disappointment at the margin dilution. The group did not break out the sales trend over Christmas, but analysts said they were flat.New Look, the fashion retailer targeted at younger women, reported a 5.1 per cent rise in underlying sales during the seven weeks over Christmas. Marks & Spencer, which reports its Christmas figures today, fell 4 per cent to 323p and GUS slipped 3 per cent to 548.5p.Debenhams, which owns 99 department stores, said like-for-like sales rose 2.8 per cent in the 19 weeks to 11 January Its gross margin rose by 20 basis points. A string of high street chains yesterday provided fresh evidence that consumers were reining back spending, sparking a sell-off in retail shares.