Maternity and baby retailer Mothercare is expected to show improved trading next week when it updates the market on its second quarter.
Singer Capital Markets analyst Matthew McEachran said that after a “disappointing” 4.1% like-for-like fall in the first quarter, he expected the second quarter to be “slightly better” at around -2% to -3%, closer to the projected full-year drop of 2%.
The retailer last week confirmed the completion of its acquisition of a 25% stake in its Australian franchisee Headline Group, for £7.2m. McEachran said the move “further advances its international strategy”.
McEachran said Mothercare’s share of profit from the partnership with Headline Group, which operates six Mothercare shops and 27 Early Learning Centre stores, is expected to be about £1m in the short term, “potentially more than doubling thereafter as the benefits of scale and rebranding kick in”.
He added that Mothercare is “looking to enter new geographies”. It already operates in countries including China and India.
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