Mothercare is hoping the imminent birth of Britain's heir to the throne will provide a fillip to the mother and baby products business after it reported a drop in sales in its home market in the latest quarter.
Many retailers are finding the going tough as consumers, whose spending generates about two-thirds of British GDP, fret over job security and a squeeze on incomes.
Mothercare has been particularly hard hit because it faces intense competition from supermarkets and internet players.
The firm, which operates in 60 countries, said on Thursday sales at most of its British stores fell 0.9% in the 15 weeks to July 13, its fiscal first quarter, compared with the same period last year, sending its shares down up to 7%.
However Chief Executive Simon Calver, in the second year of a three-year turnaround plan for the loss-making business, said the firm was well placed to capitalise on the arrival of Prince William and his wife Kate's first child, due any day.
He said Mothercare had put together a celebration range that included "Born to Rule" sleepsuits and "Princess/Prince in Training" bibs and vests, while the flagship Oxford Street store in central London would be transformed to mark the occasion.
"It's hard to gauge what sort of increase we have. I think they'll be a feelgood factor and who knows in nine months time there may even be a tick-up in the birth rate," Calver said.
The company's performance in the latest quarter compares with a weak outcome in the same quarter last year when like-for-like sales slumped 6.7%.
ONLINE SALES UP
Though analysts had forecast growth of up to 2%, Calver said the outcome was consistent with his expectations for the full 2013-14 year of a 1-2% fall in UK like-for-like sales and a possible return to growth in the following year.
While clothing sales and volumes benefited from the launch of new ranges, especially a new value range in July last year, toys and home & travel in particular were hit by an increasingly promotional market, Mothercare said.
The first quarter outcome would have been worse were it not for a 14.6% rise in online sales.
Mothercare 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 UK total to 242.
The group's overseas arm has been more fruitful, with international retail sales up 11.3% in constant currency.
It opened a net 47 stores overseas during the quarter, taking the total to 1,116 abroad.
Shares in Mothercare, which have more than doubled over the last year, were down 32.5 pence at 439 pence in early trading, valuing the business at 391 mln pounds.
