Outdoor and leisure retailer Mountain Warehouse has boosted plans for a £200m flotation this year with soaring full-year profits and sales.

The retailer reported a 36% rise in pre-tax profits for the 12 months to February 28. Like-for-likes were up by 19.3% and sales jumped by 28.7% to £141.4m. Online sales rocketed by 49%.

The latest results represent Mountain Warehouse’s fourth consecutive year of growth.

Retail Week looks at the retailer’s strengths, weaknesses, opportunities and threats.


Weather-proofing: Founder and chief executive Mark Neale says his team has worked very hard to weather-proof the business over the past year. Its “right product at the right time” strategy has paid off.

In the past year it has increased its summer clothing ranges for children and ramped up its skiing range – the latter even received a Royal stamp of approval when Prince George sported a Mountain Warehouse all-in-one on the slopes.

Quality product, lower price: While in the past its own-brand strategy was considered to be a reason online sales struggled – shoppers frequently search online for well-known brands – the quality of products has helped it move past that issue.

Its own-brand appeals to a wide customer base but targets consumers looking for a product of comparable quality to top-of-the-range brands but at substantially lower prices.

Online: While Neale admits Mountain Warehouse was late to the party in terms of online, it has certainly made up ground, with sales up 49% last year. That has been driven by extending click-and-collect by offering order from store, allowing customer to order out of stock products for free home delivery.

Meanwhile, the decision to operate its site in-house means it has a team of developers constantly working on making improvements.


Spreading itself too thin: Despite being owned by four different private equity firms before a management buy-out in 2013, the retailer’s senior team has remained relatively stable and now has full control of the business.

Following its rapid international expansion in the US, Germany, Poland and Ireland and its commitment to more stores, one potential concern is the team risks stretching itself and the business too far, too fast. The US market in particular has proved draining for many UK retailers attempting to break it.

It also needs to ensure its overseas focus doesn’t take away too much attention from its core domestic business, especially as conditions on the UK high street remain challenging.


Expansion – home and away: Overseas expansion has been top of the retailer’s priority list over the past couple of years, including a bold move into the US and Canada and a deal with Chinese etail giant Alibaba to sell via the Tmall platform.

Neale says he would like to grow the overseas presence to “half of the business” and plans to open 30 new stores across the US and Germany over the next two years.

At present it has 23 stores in North America, 10 in Poland, three in Ireland and two in Germany.

Meanwhile, Neale sees potential to build the 191-strong UK business to 300 stores. While in recent times its focus has shifted from factory outlets to the high street, it has also opened garden centre concessions.

New brands: Neale was quick to spot the opportunity for a value player in the increasingly popular athleisure market, launching standalone brand Zakti in a bid to fill it. There are four UK stores at the moment and it recently added a menswear range. Neale sees potential there for international expansion.

New ranges: It is seeking to develop its premium-end of the market with Mountainlife Extreme, which sells at nearly twice the price of the mainline range. It is expected to help it better compete with some of its more premium rivals, as well as help to drive profits in the future.


Competitive sector: The outdoor market is already crowded, particularly at the specialist end, and competition is expected to intensify in the coming years.

Mountain Warehouse’s profits margins are understood to be among the highest in the outdoor sector, and that does give it room to take the promotional route should that become necessary.

Currency issues: With the outcome of the EU referendum still uncertain, a concern for Mountain Warehouse would be a major currency swing. Neale has said the business buys stock in Asia and pays in dollars and, while it has hedging in place, it could still have an impact.