Mothercare more than doubles profits as UK turnaround plan pays off
Baby goods chain Mothercare more than doubled profits in the first half of the year, in a sign that a revamp of its struggling domestic business is on track.
Underlying pre-tax profits rose by 112 per cent to £7m in the six months to 10 October, thanks to a pick-up in trading at its UK stores and an improvement in gross margins.
Mothercare more than halved its UK business losses to £6.1m while sales at stores open more than a year increased by 3.8 per cent on the same time last year, when they rose by 1.5 per cent.
Chief executive Mark Newton-Jones tapped investors for £100m in October last year to help pay down debt and fund a turnaround that includes closing loss-making stores, revamping existing ones and improving its product ranges as well as its website.
“Improved product architecture, better buying and a focus on full price retailing helped drive the stronger margin growth,” he said.
“Our new store format is going down well with customers, and these refurbished stores are delivering encouraging uplifts in both sales and profit. The UK is annualising against our new trading approach and is performing well; but there is still more work to do,” he added.
Underlying profit at its international business fell by 14.2 per cent to £21.7m, hit by currency headwinds and reduced consumer spending. Like-for-like sales were down 2.3 per cent year-on-year.