Mothercare reports 2.2 percent rise in international sales

Mothercare’s worldwide sales were up 1 percent at 1,203million pounds (1,868.8 million dollars) for the 52-week period to 28 March 2015. Total international sales went up 2.2 percent but total UK sales were down 0.9 percent. Group sales, which reflect total UK sales and reported revenues from the international partners were down 1.5 percent reflecting the reduction in UK sales as a result of store closures and the impact of foreign currency.

Underlying group profit increased 37 percent and international profit went up 1 percent in spite of foreign currency headwinds and UK losses were reduced by 16 percent. Overall, franchise partners grew space by 9 percent year-on-year and added 52 stores. The company opened four stores in a new territory - South Korea during the year. In Russia, the company’s franchise partner for ELC is working towards opening larger stores and so closed a few smaller stores in preparation for this change. Since the year-end, Mothercare sold its stake in the Indian joint venture and the country now operates stores on a pure franchise basis.

Alan Parker, Chairman of Mothercare said, "This year has been one of major change for Mothercare. We recruited a new CEO and CFO, entered into new financing arrangements with our banks, saw off an unwelcome takeover approach and successfully completed a rights issue. I am confident that we now have the right leadership and plans to achieve our clear potential of being a world leading global retailer."

International like-for-like sales grew by 5.6 percent with all four regions – Europe including Russia, Middle East & Africa, Asia and Latin America – making a positive contribution. International retail sales were up 12.4 percent in constant currency, with all four regions delivering double-digit growth. However currency moves have had an adverse impact, particularly in Europe including Russia. As a result retail sales in actual currency were up just 2.1percent year-on-year. Wholesale sales were up 11 percent, which resulted in total international sales growth of 2.2 percent. Supported by this ongoing level of growth, international now accounts for 64 percent of worldwide space and 62 percent of worldwide sales.

Reported international sales were down 2.6 percent and underlying profit for international business was up 1 percent. Europe including Russia, remained largest region with 492 stores in 28 countries. The Middle East & Africa now has 324 stores in 12 countries. During the year, the company exited South Africa. It is currently redeveloping our website in Kuwait. Asia now has 397 stores in 13 countries. Asia now has transactional websites in China, India and Indonesia. Latin America has 60 stores in seven countries.

Online business has continued to grow strongly over the year and online sales were up 18 percent, which now accounts for 30 percent of total UK sales. Mobile and click-and-collect continue to grow and now represent 82 percent of online sessions and 36 percent of online orders respectively. The company ended the year with 189 stores - 175 Mothercare and 14 Early Learning Centre.