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Mothercare sees turnaround starting in its ecommerce business

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Mothercare has shown the early signs of a turnaround starting in its ecommerce business, thanks to internet sales up by 18.2% over the final quarter and 4% through the year.

The lift, described in a fourth quarter trading statement out this week, comes a year into the nursery retailer’s three-year transformation plan.

The boost to online was however the only signs of growth thus far in the nursery retailer’s core UK market, where total sales fell by 5.1% in the 11 weeks and 9.2% in the year to March 30. The fall was driven by the company’s closure of 56 loss-making stores during the year as it looks to become more efficient. It now trades from 255 stores, of which 196 are Mothercare stores and 59 Early Learning Centre.

Simon Calver, chief executive of Mothercare, said: “Our Direct business to customers’ homes was up 18.2% for the quarter as our customers recognised the benefits of our new internet platform, improving delivery proposition and strong promotional offers.”

That growth meant UK like-for-like sales, were merely flat in the final quarter, and 3.6% down over the year. International sales were up by 15.5% in the 11 weeks and 11.8% in the year but nonetheless, total group sales were down by 4.8% in the quarter and 6% in the full-year. Worldwide network sales grew by 6.9% in the quarter and by 1.9% in the year.

“Our focus on improving value, service and availability for both stores and Direct is beginning to have a positive impact,” the Mothercare trading statement said. “This is clearly evident in steady and continued improvement in customer satisfaction scores.”

The company said it had now started to innovate, with the launch of a value clothing range among others.

Calver added: “We are just 12 months into our three-year transformation and growth plan and while we still have much to do, our business is already on a firmer footing.” He said that the company was still cautious on the outlook for consumer spending in the UK and the Eurozone, but added: “We can look forward to the new year with confidence.”

In January Mothercare Australia, in which Mothercare group had a 23% stake, went into administration. Its contribution to figures is not reflected in the figures above.

Full-year results will be reported on May 23.

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