The mother-and-baby retailer proved itself as one of retail’s most consistent success stories, defying the consumer downturn to deliver pre-tax profits up 71 per cent to£38.6 million in the year to March 29.
The group outlined plans to close larger outlets in favour of smaller ones and downsize others, affecting a third of its estate. The changes to the 145 stores are set to achieve an annualised saving of£5 million.
Sales – including the performance of Early Learning Centre (ELC), which was acquired last June – rose 3.6 per cent for the year to£703.6 million, with UK like-for-likes up 2.9 per cent.
Chief executive Ben Gordon said the acquisition of ELC was proving successful. “The benefits from the acquisition of ELC will be£10 million, up from the£8 million figure we previously announced. The integration of ELC into some Mothercare stores will be completed by this time next year and we are very pleased with ELC’s performance,” he said.
Gordon said the brands would be kept separate, but the group will roll out a fascia with both brands incorporated in it.
Landsbanki analyst Paul Deacon said international growth and a strong multichannel proposition placed the retailer in a strong position for the future.
“The combination of an almost open-ended growth opportunity overseas, a very credible recovery story in the UK – even in the face of the downturn – and one of the most successful multichannel strategies around is gaining traction,” he said.
Sales at Mothercare’s Direct business, including its online and Direct in Store offers, rose 78.9 per cent to£85.5 million. The international online offer will be expanded over the next few years.
Mothercare has committed to at least 100 international openings this year, with its first store in China, in partnership with Goodbaby, set to open in July. It will also open stores this year in Lithuania and Croatia.