Mothercare’s turnaround has burst out of its baby grow as UK same-store sales rose for the first time in five years and it set its sights on becoming a “world-leading global retailer”.
The company revealed that UK losses narrowed last year as the company accelerated its online sales, closed shops and introduced more upmarket brands into its ranges.
Shares in the retailer, which sells clothing ranges designed with help from the celebrity mums Myleene Klass and Jools Oliver, jumped 10.25p to 235p as the City welcomed the improvements.
The high street stalwart had a busy year in 2014, seeing off an unwelcome takeover approach from an opportunistic American retailer, Destination Maternity; raising £100m through a rights issue; and hiring a new chief executive and finance director.
Its chairman, Alan Parker, said: “This year has been one of major change for Mothercare. I am confident that we now have the right leadership and plans to achieve our clear potential of being a world- leading global retailer.”
Underlying pre-tax profits for the full year were up 37 per cent at £13m and UK sales on a like-for-like basis increased by 2 per cent.
However, total UK sales fell as the retailer pulled the shutters down on 31 underperforming stores.
UK underlying losses were lower at £18m, compared with a loss of £21.5m last year.
The international business continues to expand, with worldwide sales up 1 per cent at £1.2bn, as the brand opened in South Korea for the first time. Mothercare’s international stores now account for 64 per cent of its shop space and 62 per cent of its worldwide sales.
The new chief executive Mark Newton-Jones, who was confirmed in his post last July, said trading conditions remained challenging but that the company was making progress in the six areas in which it hopes to improve the business.
The former boss of the Littlewoods owner Shop Direct said that Mothercare’s efforts to sell its products at full price in the UK were starting to pay off, with margins stabilising.
The new chief executive’s push to develop Mothercare’s online reputation and capacity has also helped, with internet sales climbing 18 per cent. Online sales now account for 30 per cent of total UK sales.Reuse content