Mothercare put its full-year results out this morning. The mother-and-baby retailer, a Leading retailer in IRUK Top500 research, is three years into a transformation programme designed to put digital first in the business. Chief executive Mark Newton-Jones said: “We are now in the third year of our turnaround and I am pleased to report that we have achieved much of what we set out to do from our six pillar strategy introduced in 2014. Whilst we are proud of what we’ve achieved to date, we believe we are only halfway through the transformation of the Mothercare brand.”
Here are the multichannel highlights from its update.
How Mothercare sees its customers
With a database of more than 3m customers – up from 150,000 three years ago – and 4m e-receipts, Newton-Jones says Mothercare now has a “far deeper understanding” of its customers, their shopping and browsing behaviour and of how important the brand is to them. “This knowledge can now inform us as to how we shape our business and our ranges, to become ever more relevant to our modern digitally enabled customer. Our customers shop across both digital and store channels and thus we will invest in both.” It’s also enabling the retailer to personalise the shopping experience for its customers.
Online sales
Some 41% of Mothercare’s UK sales are now online, with 83% of those sales coming via mobile devices. During the year ecommerce sales rose by 7.8% to about £172m. Newton-Jones said that digital was now “on a trajectory to be over half of our turnover”. However, online is very much a part of an omnichannel shopping experience: connected customers are moving “seamlessly” between online and stores: some 40% of online sales are generated by iPads in its stores, and 25% of orders are picked up in store.
Stores
Almost three-quarters (70%) of Mothercare’s stores have now been refurbished. Newton-Jones says that the role of the store will be in future to offer specialist advice and service and “first-class product presentation”. But, he said, store numbers would reduce over time “as we focus on a regional presence in key conurbations across the UK.”
Mothercare also says that the store estate is “more agile”, with an average lease length of five years.
International
International sales grew in total by 10.6% over the year, although like-for-like sales . The retailer opened 10 new websites, with the effect that 21 countries are now online, via 26 channels, and international online sales are now up by 64%, discounting the effect of currency changes.
Changing focus
Mothercare is moving to focus its products more tightly, concentrating on maternity and newborn up to pre-school aged children. “We are a true specialist in these categories and thus we will build our future ranges and services upon this basis.”
Investment in digital infrastructure
Mothercare has replatformed its ecommerce function and launched a new responsive website. That, it says, has improved conversion and led to a faster checkout. Improved conversion has also come from an upgrade to its app, which has now been downloaded 1m times. The retailer has also upgraded its planning and merchandising systems to enable better stock management and grow full-price sales. It’s also invested in warehousing in order to move all its product fulfillment to one site, serving both stores and online. “In the longer term,” said Newton-Jones, “this will enable us to reduce overall stock levels.”
Board-level changes
A new role of chief customer officer reflects the omnichannel consumer, taking on executive responsibility for both stores and online, brand and marketing. Another new role is the global product officer, Matt Stringer, who heads product planning, sourcing and distribution for international markets, while Kevin Rusling is international managing director.
The figures
During the year worldwide sales reached £1.2bn, 6.3% ahead of the same time last year. Group sales of £667.4m were 2.2% down on the same time last year. In the UK, sales reached £459.4m, down by 0.1% in total, but up by 1.1% on a like-for-like basis that strips out the effect of store openings and closures. Profits before exceptional items were at £19.7m, 1% up on the same time last year, but after exceptional items of £12.6m, pre-tax profits of £7.1m were down from the £9.7m reported last time.
