Mountain Warehouse profits jump as it revs up expansion

The outdoor goods specialist revealed an 18% jump in pre-tax profits year on year to £4.7m in the six months to August 27, bolstered by a 19.3% rise in overall sales and 50.3% spike in international sales.

The retailer’s 80-strong international store estate across seven countries including the US, Germany and Poland accounted for a quarter of overall sales during the period.

Chief executive Mark Neale told Retail Week that Mountain Warehouse will enter the Netherlands and Czech Republic with bricks-and-mortar stores early next year as part of its “medium-term aim” to have 50% of its stores and sales international.

“Because of Brexit it will be helpful to have a more diverse portfolio of stores and be less dependent on any one market”

Mountain Warehouse chief executive Mark Neale

“Because of Brexit it will be helpful to have a more diverse portfolio of stores and be less dependent on any one market,” Neale said.

“We buy a lot in US dollars and if we have more revenue coming in in other currencies it will be useful to flatten that risk for us.”

The retailer opened 18 new stores during the period, 10 of which were overseas, and plans to open 10 more by Christmas.

In the longer term, Neale said he wanted to have 300 UK stores and 300 overseas stores – a significant uplift from its current 280-strong bricks-and-mortar estate.

Zakti

Mountain Warehouse also plans to roll out a capsule collection from its sister brand Zakti across all of its stores early next year.

Neale said that the activewear brand, which has five standalone stores in the UK, helped the business to be “less dependent on inclement weather” and attracted a new type of customer.

“I’m not saying we won’t open any more Zakti standalone stores, but it’s not an immediate priority – it might mean over time that we do bigger Mountain Warehouse stores though,” said Neale.

Mountain Warehouse created more than 200 new jobs during the period, taking its total workforce to 2,250, and reported a 18.5% hike in online sales.

Neale said that the retailer’s own-brand, value-led, family proposition made it more resilient to the volatile retail environment, both in the golden quarter and next year.

“We are very much at the value end of the market and that’s not a bad place to be over the last period and, if you believe what you read, doesn’t look like a bad place to be over the coming period,” he said.

“It’s a brave retailer who makes predictions at this stage in the calendar because there’s quite a lot of the season still to come, but so far fingers crossed we’re on track for Christmas and it’s all going well.”