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Online sales lift at Mothercare and Halfords

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Mothercare and Halfords today reported growing online sales – reflecting the growing importance of ecommerce and multichannel trading in their businesses.

Online sales now account for a third of Mothercare’s UK sales, with a third of them collected in store, the company said today.

The nursery retailer reported growing online sales after a year in which its overall UK sales fell by 7%. Direct – or online – sales grew by 5% to £134.1m in the year to March 29. Direct in Home accounted for £99.3m of the total, up by 5.9% on the previous year, while Direct in Store grew by 2.7% to £34.8m.

It is to launch a tablet app in response to growing mobile traffic, which accounts to 35% of online traffic.

“We expect continuing growth in our Direct business and it is important because online customers spend twice as much as our store-only customers and multichannel customers spend twice as much again,” said the full-year statement.

It’s growth that will be needed as the retailer looks to return its UK business to profitability.

The figures came as Mothercare reported full-year results that showed worldwide network sales rise by 0.5% to £1.2bn, but total retail sales fall 2.6% to £724.9m with UK sales down by 7.6% at £462.3m as loss-making stores closed – or 1.9% on a like-for-like basis. International sales grew by 2.5%, like-for-like, to £729.2m.

Underlying pre-tax losses grew by 61% to £9.5m, but at the bottom line, after exceptional items of £19.9m, the company reported a pre-tax loss of £26.3m, 10% up on last year’s £23.9m. Underlying UK losses came in at £21.5m, 0.5% more than last year.

Over the second half of the year the company launched the My Mothercare which aims to collect life-stage data with a view to improving customer service. Its new CRM system has a database of more than a million and, it said, “will give us greater insight into our customers’ shopping habits and allow us to tailor our email marketing campaigns.”

Alan Parker, Mothercare chairman, said peak trading had been a disappointment. “We saw a recovery in the Q4 trading performance and have delivered full-year results in line with market expectations set in January 2014. This momentum has been maintained.”

He added: “In the UK, we have continued to close loss-making stores and operate a leaner business. The market remains competitive and our teams are working hard to deliver an improved product range that offers even better value for money for our customers, and an improved multi-channel service.”

Meanwhile at Halfords, the automotive-to-cycling equipment retailer reported progress with its Click with the Digital Future programme, which aims to improve the customer experience across channels. Ongoing investment has so far included a website relaunch including more intuitive navigation and a move to enable customers to pay for Click and Collect transactions in store. Other improvements have included moving the cut-off time for Click and Collect orders to 6pm the day before.

Online sales grew in response up by 17.7% in the full-year, and up by 27.5% in the fourth quarter alone. They helped lift retail sales by 9.9%, while Halfords’ Autocentres business grew by 4.3% to take group revenues up by 7.9% to £939.7m. Pre-tax profits rose by 2.3% to £72.6m.

Matt Davies, chief executive, said: “This was a year of significant Retail sales growth and the start of a strategic investment programme designed to deliver sustainable profit growth over the medium term. Our actions resulted in a particularly strong performance in every element of our cycling category, illustrating our leading and growing role in the market. Car maintenance sales were also encouraging, especially against the backdrop of a mild winter. Within autocentres, new leadership is now in place as we look to grow profitability in that business.

“In the first year of our Getting Into Gear strategy our targets presented a year ago have been achieved. We are getting better prepared to delight our customers both in-store and online and we’re making good progress with our refreshed stores, our infrastructure and the product range.”

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