Mothercare acquires toy retailer
Maternity and children's retailer Mothercare has acquired Chelsea Stores, the owner of toy retailer Early Learning Centre. Mothercare paid £85 million in cash and shares for ELC, which makes educational toys. Following completion of the proposed acquisition, Mothercare will own and operate both the ELC and Mothercare brands.
The transaction will allow Mothercare to broaden its current offering of maternity wear, baby wear, buggies and cots and to expand its global reach. Mothercare said the enlarged group will have 420 international franchise stores. The combined company is also expected to benefit from margin benefits through sourcing and in-house design capabilities. “Given de complementary nature of the two businesses there is an opportunity for efficiency improvements and cost saving,” Mothercare said in a statement.
ELC's chief executive Nigel Robertson said: “Mothercare and ELC working together makes perfect sense.” In the year ended May 2006, Chelsea Stores realised a pre-tax loss of £9.8 million, compared with a profit of £3.5 million the year before.
www.mothercare.co.uk
2 May 2007
Mothercare looks to China
Mothercare is in talks with China's biggest manufacturer of childcare products about an alliance that would involve the British retailer taking its first steps on Chinese soil. Ben Gordon is in early-stage talks with Goodbaby, a private equity backed firm, about the launch of a chain of jointly branded stores targeted at China's increasingly free-spending middle class. It is thought the talks could eventually lead to Mothercare taking a minority stake in Goodbaby, although it was not clear last night whether such a move had already been discussed. If a deal is reached between the two sides to take Mothercare into China, it would be arguably the most important stage in the company's international expansion to date.
Mothercare has been one of the British high street's most successful international exports, with overseas franchise stores in 38 countries now accounting for almost a third of group sales. Goodbaby is among China's best-known consumer brands. ARC is keen to recruit the retailing expertise of an international partner such as Mothercare to facilitate its expansion across China.
8 April 2007
Mothercare sees UK sales rise
Mothercare saw total UK rise 1.3 per cent. Like-for-like UK sales were up 0.8 per cent. ?Worldwide sales for the 13 weeks to 12 January 2007 were up 5.1 per cent, and for the 41 weeks to 12 January were up 5.3 per cent.
Mothercare stated: "Trading conditions were particularly difficult in November but improved in December". As a result the group's price markdowns were 'higher than planned' in the third quarter. Ben Gordon, Chief Executive said 'Mothercare delivered a resilient third quarter sales performance in what remained a volatile UK consumer environment. Direct in Home sales were up 22 per cent supported by the successful launch in November of our new state of the art online platform, built by Amazon Services.
This performance demonstrates the importance of our multi channel strategy in the UK. The International business continues to grow rapidly with sales up 38 per cent, driven by strong like-for- like sales and 53 new store openings in the year to date, taking the total to 319 including the recent opening of our 18th store in Russia and our 10th store in India.'
www.mothercare.co.uk
19 January 2007
Mothercare foresees international growth
Mother and babywear specialist retailer Mothercare has said it expects its international business to grow significantly. As the company posted its first-half results, chief executive Ben Gordon said: “We are delighted with the performance of our International business, which as of today comprises 307 stores. We expect international to grow strongly and despite a challenging UK market we believe we are well placed as we look to the second half.” The company currently has presences in 38 countries. In the past six months it opened 32 stores abroad, including a 14 th store in Russia . Sales outside the UK soared 27.8 percent to £44.1 million, while trading in the UK improved by only 2 percent to £220.2 million. Like for like sales in the UK , where the company operates around 230 stores, were up 1.9 percent in the first half.
Group sales for the period rose 5.6 percent to £264.3 million, while online and phone sales gained 15 percent to £11.5 million. Group profit rose 12.3 percent to £12.8 million.
Mothercare is currently working out a three-part strategy: focusing on its specialist product assortment, efficiency and international growth, both in store and online. The company has worked to improve the quality and design of its product range and concentrated on product development in the first half by extending the range with its own brand bottles. Meanwhile, the firm launched a new out-of-town format in two trial stores, in Watford and Basingstoke . The new format offers a more comprehensive range and better lay-out and the company said customer feedback had been “encouraging”, leading to five more roll-outs. In addition, Mothercare said it would be relocating its Oxford Street store to a “smaller but more efficient” location across the road. The disposal of the old store is generating an exceptional profit of £1.6 million and has been included in the first half. The group also pointed out that it has successfully completed the final phase of its move to a new distribution centre, thereby “driving improved availability”.
www.mothercare.com
17 November 2006
Mothercare see international expansion
Mother and baby retailer Mothercare have revealed plans for overseas expansion, with 50 international stores scheduled to open in the next few months. Mothercare's overseas franchise business currently operates stores in 19 countries, primarily in Europe , the Middle East and the Far East . It has already opened 34 stores outside the UK this year, including its 300th overseas shop which opened this week in Russia .
The Mothercare brand translates effectively into many markets and the International team continues to strengthen existing relationships and build new partnerships with franchisees around the world. Now with the group's 14th store in Russia , chief executive Ben Gordon told the Guardian the group is also stepping up its expansion plans in India , where it currently has eight outlets.
Chief executive Ben Gordon told the Guardian the Mothercare brand "travels well” and that the store gets the same reaction when opening stores abroad as it did when the company first launched in England in the 1960s. It's a brand that people can trust."
Meanwhile in the UK the group is overcoming its decline in retail sales with a 1.9% increase in underlying sales in its first half. It is the biggest retailer and fitter of child car seats and was given a boost by the rush to buy seats for older children ahead of new legislation last month. Analysts have said the increase in international sales was "impressive" and the UK performance was also ahead of expectations. He is leaving his full year forecast unchanged but said there is scope for upgrades on the international side.
www.mothercare.co.uk
19 October 2006
Mothercare sees international growth
Mothercare has seen strong international sales from its direct business confirming the importance of the company's multi channel strategy. Group sales for the 12 weeks to 1 April 2006 were up 5.6%. Group sales for the 25 weeks to 1 April 2006 were up 4.8% and for the 53 weeks to 1 April 2006 , were up 3.7%. UK store like for like sales were up 0.2% for the 12 weeks to 1 April 2006 . After adjusting for the timing of Easter, UK store like for like sales were up by an estimated 1.2% for the 12 weeks.
Ben Gordon, Chief Executive said: 'We continue to improve Mothercare's trading capability and we are pleased that the company is performing strongly. The resilience of the UK business in a difficult trading environment reflects the actions we have taken to develop Mothercare's position as a specialist multi-channel retailer. Our international expansion continues apace, reinforcing the strength of the Mothercare brand worldwide.'
April 2006
Mothercare Q1 sales drop
British mother and babycare products retailer Mothercare Plc reported a 1.8 percent drop in first quarter like-for-like sales in the UK. "The environment is quite difficult,"said chief ececutive Ben Gordon. "It's a pretty good performance given the retail conditions." Sales outside the UK, however, rose 31 per cent, thanks to a more efficient distribution network. Gordon expects that number to hold up at 15 to 20 per cent at the end of the year. It is the first time that points of sale abroad outnumer those in the UK, with 236 foreign outlets and 235 shops at home.
The company will focus on expanding abroad and plans to open at least 26 more shops outside the UK by March 2006, said Gordon. The amount of shops in the UK would remain more or less the same. However, because of its large out of town stores in the UK, Britain still represents 75 per cent of total sales. With Mothercare's clearance sale going well, sales in the last 15 weekswere up by 3.3 per cent, said the company. Meanwhile Gordon agreed with the market forecast of £ 20.5 million for full-year pre-tax profits.
www.mothercare.com
18 July 2005
Mothercare Faces eBay Competition
Mother-and-baby goods retailer Mothercare is vulnerable to sales on eBay, the popular online auction site, according to a city analyst. Mothercare, which is due to issue a trading update on Thursday, saw its share price fall by 4.3 per cent in trading on Tuesday, as analysts speculated that the retailer is suffering in the current depressed UK retail market.
Investec Securities analyst Matthew McEachran said in a research note: "Anecdotal evidence from other relevant competitors leads us to believe that sales and margin performance may be below expectations. "Furthermore, we believe that competition on the high street may be intensifying, driven by the weak trading conditions. Also, we now suggest that the explosive growth of eBay usage could potentially influence non-clothing sales going forward."
There has always been a strong secondary market in baby clothes and products, but the growth of eBay means that many items which were once simply passed on between family and friends or donated to charity sales are being put up for auction on the Internet. In January, Mothercare reported that UK store sales fell by 1.1 per cent, with like-for-likes down 1.6 per cent, in the eight weeks to January 7. At the time, chief executive Ben Gordon, who has spearheaded the retailer's sales recovery over the past two years, said Mothercare's overall performance was "resilient in the tougher trading environment."
www.mothercare.com
29 March 2005
Tough trading for Mothercare
Mothercare has seen its recent healthy sales growth stall in the tough UK sales environment over Christmas. In the 13 weeks to January 7, total UK store sales decreased by 0.6 per cent year-on-year, with UK store like-for-like sales down by 0.8 per cent. Across the eight weeks to January 7, UK store sales decreased by 1.1 per cent with like-for-likes down 1.6 per cent.
Mothercare said full year margins are likely to be in line with its expectations, with the winter sales going well and end of season stock levels tightly controlled.
www.mothercare.com
13 January 2005
Mothercare to expand abroad
The British mother and baby retailer, Mothercare, has announced plans to expand its retail presence abroad. The Watford-based retailer intends to open some 100 stores abroad over the next three to four years, while its international franchise business continues to thrive.
In the first half, Mothercare franchise like-for-like sales rose by 10% and Mothercare sales to franchises climbed 17% to GBP29.5 million. During this period Mothercare opened twelve stores abroad, including its first stores in the Ukraine and Romania. Eighteen more stores will be opened in the second half. The total amount of stores will amount to 218 at the end of the year.
The group sales increased by 2.5% to GBP243 million, with operating profits before exceptional items rising from GBP8.7 million to GBP10 million.
www.mothercare.com
22 November 2004