Mothercare set for 50th anniversary

Mothercare will mark a rare achievement in the UK retail sector this week as it passes its 50th anniversary.

The mothers-to-be, babies and children’s goods retailer was founded by Iraqi-born entrepreneur Selim Zilkha, with its first store opening in Surrey in 1961, and now has 1,289 stores in 55 countries.

But while the store is one of the most recognised brands, especially in the UK but also in Ireland, its international business, which includes 900 of its total stores, is outperforming its home market.

Mothercare and the wider retail sector have been hit by a tightening consumer spending squeeze driven by high inflation, muted wage growth and increased economic uncertainty.

Nick Bubb, retail analyst at Arden Partners, said: “The Mothercare brand is stronger overseas than in the UK and it is the worrying decline in UK profitability that is undermining the international growth story.”

Mothercare recently unveiled plans to overhaul its UK retail estate, which will include 110 high-street store closures as the business focuses on out-of-town Parenting Centres, which contain its Early Learning Centre brand.

The group said UK like-for-like sales were down 4.3% in the 15 weeks to July 9, while international sales were up 18.2%. It will next update the market on October 13.

Forecasts for Mothercare full-year pre-tax profits range between £26.5m and £29.7m, compared with £28.5m last year.

The FTSE-250 retailer, which has a market value of about £300 million, originally focused on pushchairs, nursery furniture and maternity clothing, but has since expanded its range to include clothing for toddlers, maternity clothing, furniture, bedding, feeding, bathing, travel equipment and toys.

Mothercare first became a public company in 1972.

Mr Zilkha, who served in the US Army during the Second World War, sold his stake in Mothercare in 1981 before it merged with the Habitat chain of retailers to form Habitat Mothercare.

Habitat Mothercare plc merged with British Home Stores in 1986 but it was rationalised in the 1990s and Mothercare became the sole brand name in 2000.

The group acquired Chelsea Stores Holdings, the owner of the Early Learning Centre (ELC) brand, in 2007.

Gurgle.com, a social networking site for new mothers was launched by Mothercare in 2007.

Brokers Singer Capital downgraded its full-year forecast for the group earlier this week by £2.5m to £26m.

Matthew McEachran, analyst at Singer Capital, said: “Mothercare continues to demonstrate success in overseas markets.

“In the meantime, however, with a tail of underperforming high street stores in this UK transition phase, and now with signs of big-ticket weakness in home and travel, we are downgrading forecasts again.”