Online sales lift Mothercare

Mothercare today revealed a further solid sales performance as the babycare retailer was buoyed by a surge in demand at its internet and catalogue arm.

The firm hailed a “particularly strong” performance at the Direct In Home operation for helping fourth quarter group sales surge 31.6%.

Like-for-like sales at the division in the three months to March 29 were up by almost a quarter while overall annual sales more than doubled as growing numbers of new mums and dads switched to shopping on the web.

The firm said fourth-quarter group sales, up 3.9% on a comparable basis, also benefited from its acquisition of Early Learning Centre last year.

UK like-for-like sales during the three-month period were up 2.9%, the same level for the full-year, and Mothercare added that UK margins have improved further due to tight stock control.

Ben Gordon, chief executive, said: “The multi-channel UK business has performed well, particularly Direct In Home, and the integration of the Early Learning Centre is on track.

“International continues its strong momentum, further strengthened by the addition of the Early Learning Centre brand, with a total of 494 franchise stores operating today in 48 countries”.

Mothercare bought Early Learning Centre for £85m (€108m) and today added that its plan for optimising the company’s property portfolio was nearing completion.

The firm also revealed strong trading overseas, with fourth quarter sales rising 31.3%, up 10.1% on a comparable basis. Seventy-seven franchise store were opened during the year.

Mothercare also recently entered the Chinese market for the first time through a joint venture with the country’s largest manufacturer of childcare products, Goodbaby.

The latest sales rise comes after Mothercare revived its fortunes in the past two years, following an overhaul of its UK high street operations.

Shares, which have outperformed the general retail sector by 36% over the last six months, rose more than 1% today as investors welcomed the update.

Keith Bowman, equity analyst at Hargreaves Lansdown, said: “Overall, given a combination of growing international diversification, economies of scale being achieved via the Early Learning acquisition and an underlying perception that the sale of children’s goods remains relatively defensive – as parents consider spending on their offspring an essential – market consensus opinion remains positive in tone”.