Mothercare posts full-year profit on turnaround plan

Mothercare’s British business has suffered heavy losses as margins eroded over the past few years, partly hurt by cheaper competition such as Primark, and online retailers including Amazon.

“Its been a story about the reinvention of Mothercare in the UK,” chief executive Mark Newton-Jones said, adding that the company has now refurbished more than 40 per cent of its estate and is investing heavily online.

Two years into its turnaround plan, Mr Newton-Jones said, Mothercare’s British business is attracting a broader base of customers and no longer trying to compete with supermarkets at the lowest-cost end of the market. He said it was instead increasing the quality of its offering and targeting an “aspirational” customer base.

Mothercare reported a profit before tax after exceptional items of £9.7m for the 52-week period ended March 26, the first full-year profit since 2011, compared with a loss of £13.1m a year earlier.

Sales at UK stores open more than a year rose 3.6 per cent, with total UK sales up 0.3 per cent to £459.7m.

However, concerns remain over Mothercare’s overseas business, mainly due to currency swings, faltering consumer spending in China and weaker oil prices that have hurt demand in the Middle East.

Sales at international stores open more than a year were down 4.5 per cent.

Mothercare’s international retail space grew 4.6 per cent as it ended the year with 1,310 stores.