Mothercare to pave way for global e-tailing as sales soar

Chief executive Ben Gordon told Retail Week that the retailer is working on enabling its franchise partners to sell through a Mothercare site using their own currencies and languages. Mothercare’s international sales are booming and rose 44.5 per cent in the year to March 28.

“The solution will allow multi-language and multi-currency options,” said Gordon. “Our multichannel business is becoming more effective and bigger and bigger.”

Although he could not confirm a date for the roll-out, Gordon expects that it will be in time to benefit from rapidly increasing internet penetration, even in its developing markets.

In the UK, Mothercare’s like-for-like sales were up 3.7 per cent in its fourth quarter – 1.4 per cent for the full year – its 15th consecutive quarter of like-for-like sales growth. 

The retailer reported that margins for the year would be in line with forecasts but expects them to come under further pressure in the coming year, partly because of the weakness of the pound.  

Singer Capital Markets analyst Matthew McEachran said that Mothercare has the ability to offset the effect through its international business. He said: “Nevertheless, whereas before we suspected that the final phase of synergy gains from Early Learning Centre’s [ELC] integration might mitigate the remaining adverse effect, the general sense is that gross margins will still move adversely in the year ahead compared to broadly flat previous assumptions.”

Gordon said that the integration of ELC will be completed by the middle of this year, adding: “ELC is fitting in very well, particularly in store-in-stores.”

He said various factors should enable Mothercare to ride out the downturn. “We are in a resilient sector, not discretionary, and we have the best product ranges now that we have ever had,” he said. 

Altium Securities analyst David Stoddart said: “Mothercare boasts two characteristics that deserve a premium rating to the sector: a cash-rich balance sheet and a proven international business with substantial expansion potential.”