It is no secret that high street commercial property traders are struggling in the UK, partly as a result of the on-going double dip recession. However, it is not only tough economic situations that are forcing commercial property shops to reassess their marketing techniques – increasing competition from online retailers, as well as mass imports using sites such as eBay and Amazon, mean that high street traders are often overlooked when consumers are hunting for a bargain.
This is becoming increasingly evident when looking at high street trade since the start of the recession in 2007. Today, some cities across the UK have as much as 30 per cent of commercial retail properties on the high street lying empty, while chains such as Woolworths, Blacks Leisure and GAME have been forced to sell out or take the further necessary step of going into administration completely.
Fortunately, some traditionally beloved British commercial property brands are managing to keep their heads above water, as Mothercare Plc proved in their first quarterly report this week.
For the period covering the 15 weeks up to the 14th July, the commercial property chain posted a growth of worldwide network sales of 1.1 per cent. While this may not be a huge amount, it is substantial enough given the current global economy. Predictably, sales were strongest in Asia Pacific, the Middle East and Africa – areas out of the struggling Eurozone. This goes a long way in explaining the international retail sales growth for the commercial property chain, which totalled an astonishing 11 per cent.
This also allows the high street chain to consider further expansion into these areas in the coming years, therefore continuing to boost their international consumer base and revenue.
Chairman of the Mothercare Plc, Alan Parker said; “In line with our plans, we opened a net 25 stores outside the UK, taking the total overseas store numbers to 1,053, opening our 100th store in Saudi Arabia.
“Forward orders and store opening plans from our franchise partners give us confidence that we will deliver on our stated International growth targets.”
Unfortunately, the picture is not so sunny here in the UK, with the figure for total UK sales down 10.2 per cent. This included a drop in UK like-for-like sales of 6.7 per cent, despite the three year Transformation and Growth plan being implemented in this quarter. However, Mr Parker remains optimistic that the business restructuring plans will see improving results in the chain’s UK commercial properties later in 2012.
He continued; “We have made good progress implementing the three-year Transformation and Growth plan with benefits to accrue during the second half of the year, as expected.
“International growth continues to offset weaker trading in the UK.”
The Transformation and Growth plan certainly appears to be having some effect as, although UK sales have fallen in this quarter, they are nowhere near as dramatically slumped as previous quarterly reports posted by the commercial property chain have been. Restructuring has also gone a long way towards saving the company money, with the closure of 16 loss making commercial properties occurring during the quarter.
Mr Parker concluded by saying; “The quarter ended with a clean stock position and our cash flows have been tightly controlled.
“We remain confident about the delivery of our three year Transformation and Growth plan with the cost reduction programme on track.”
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