Mothercare boosted by overseas growth
Mothercare today reported a 22% jump in half-year profits after “exceptional” growth in its overseas business offset a challenging UK and Irish market.
The retail chain, which has 1,217 stores in 54 countries, said total sales rose 7.5% to £590.2m (€695m) in the six months to October 9 and helped underlying profits improve to £12.2m (€14.4m) in the period.
Chief executive Ben Gordon said Mothercare’s international arm was going from strength to strength after sales jumped 17.3% to £293m (€345m) and exceeded the retailer’s takings on the UK high street for the first time.
In the UK business, profits for the half-year slumped to £2.8m (€3.3m) from £9m (€10.6m) due to higher freight costs and a 2.1% drop in retail sales to £286.8m (€338m).
Mothercare said a 3.8% decline in UK like-for-like sales reflected the impact of out-of-town store openings on neighbouring shops as Mothercare carries out a plan to boost profits through larger parenting centres.
It currently has 96 of the centres after opening seven such sites and closing 20 low profit high street stores in the financial year to date.
Mr Gordon added: “The UK consumer environment remains uncertain and we continue to plan cautiously. We are however benefiting significantly from the strategic initiatives we have taken and from the rapid growth of international.”
Mothercare opened 112 international stores in the period and has increased its store opening target for the year from 100 to 150, boosting retail space by 20%. The expansion has included the company’s 50th store in India.
In Mothercare’s home shopping business, sales were 11.6% higher at £64.7m (€76m).
