Mothercare’s turnaround has burst out of its babygrow as UK same-store sales rose for the first time in five years and the chain set its sights on becoming a “world-leading, global retailer”.
UK losses narrowed last year as the company accelerated its online business, closed shops and introduced more upmarket brands.
Shares in the retailer, which sells clothing ranges designed with help from celebrity mums Mylene Klass and Jools Oliver, jumped 5% to 236p as the City welcomed the improvements.
The High Street stalwart had a busy year in 2014, seeing off an unwelcome takeover approach from an opportunistic American retailer, Destination Maternity, raising £100 million through a rights issue and hiring a new chief executive and finance director.
Chairman Alan Parker said: “This year has been one of major change for Mothercare. I am confident that we now have the right leadership and plans to achieve our clear potential of being a world-leading global retailer.”
Underlying, pre-tax profit for the full year was up 37% at £13 million, and UK sales on a like-for-like basis rose by 2%.
However, total UK sales fell as the retailer pulled the shutters down on 31 underperforming stores.
UK underlying losses were lower at £18 million, compared with a loss of £21.5 million last year.
The international business continues to expand, with worldwide sales up 1% at £1.2 billion, as the brand opened in South Korea for the first time. Mothercare’s international stores now account for 64% of its shop space and 62% of its worldwide sales.
New chief executive Mark Newton-Jones, who was confirmed in his post last July, said that trading conditions remained challenging but that the company was making progress in the six areas through which it hopes to improve the business.
The ex-boss of Littlewoods owner Shop Direct said that the retailer’s efforts to sell its products at full price in the UK were starting to pay off, with margins stabilising.
His push to develop Mothercare’s online reputation and capacity has also helped with online sales climbing 18%. These now account for 30% of total UK sales.
