While the recession did not necessarily send all retailers into administration, a fate which befell popular high street names such as JJB Sports and La Senza, the vast majority struggled to make ends meet amidst a spectacular fall in consumer confidence. One chain which was particularly affected by this was Mothercare, which still faces several issues in remaining profitable to this day.
Fortunately, its results for the second quarter of this financial year paint a much brighter picture than previous reports, especially in Mothercare’s overseas business. Although group reported sales dipped by 0.5 per cent in the 13 weeks to the 28th October, worldwide network sales managed an impressive climb of 3.9 per cent, indicating that Mothercare products are very much in demand internationally.
This was reinforced by a year on year rise in international commercial property space of 11.9 per cent, bringing the group’s total international floor space to 2.5 million square feet. However, this growth was not echoed in the UK, where five loss making stores closed under Mothercare’s ongoing Transformation and Growth plan.
Chief executive Simon Calver says; “We have delivered another quarter of growth in worldwide network sales.
“We now operate from 1,393 stores across 60 markets – as planned, during the quarter we closed a further five loss making stores in the UK, and year on year increased space by 11.9 per cent across our international markets.
“We continue to see double digit growth in International retail sales, benefitting from the strength and diversified nature of our International business.”
Unfortunately, while news on the international front may be resoundingly positive, within the UK very real problems remain. Like for like sales fell once more, this time by 1.9 per cent, although this is in comparison to a relatively strong quarter of 2012.
Yet the Direct in Home aspect of the business remains popular with consumers, rising 8.3 per cent during the quarter. This brings total growth for Direct in Home to 11.6 per cent across the year so far.
Mr Calver concluded by voicing his determination to keep up momentum during the coming months.
He said; “UK Direct delivered another quarter of growth and we expect further multi-channel progress as we continue to improve our service for customers with next day click and collect extended to all UK Early Learning Centre stores in time for Christmas trading.
“The UK market in Home and Travel remained highly promotional and autumn/winter clothing faced the same warm weather challenges as the rest of the sector but is gaining market share.
“Whilst this has resulted in a margin environment that is more challenging than expected, we continue to focus on profitable sales and cash margin.”
Why do you think Mothercare is still struggling to attract custom in the UK whilst seeing comparatively huge success internationally – is it a matter of pricing, or do competitors offer a more diverse range which appeals to a broader consumer base?
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