MOTHER and baby retailer Mothercare has reported a slump in profits after warehouse-related problems set back its recovery, and confirmed its chairman would be stepping down.

The group, which issued two profit warnings at the turn of the year, said it was searching for a successor for chairman Alan Smith, who has been with the firm since 1996.

It has commissioned searches for two new non-executive directors, one of whom will replace Mr Smith.

Chief executive Chris Martin said Mr Smith was coming up to retirement.

The announcement came as Mothercare showed pre-tax profits before exceptional costs for the year to March 30 slid to £4.2m, from £10.2m.

The group's figures suffered following its move to a new warehouse in Daventry, Northamptonshire last August.

Teething problems at the warehouse led to severe stock shortages in its stores during the autumn.