January 15, 2009 10:13 pm

Doting parents help boost Mothercare

The refusal of parents to skimp on their babies helped Mothercare increase its sales in the past quarter, even as many of its high street neighbours suffered.

Total group sales at the mother and baby chain rose 4.2 per cent year-on-year in the 13 weeks to January 9, while it drew a 1.1 per cent rise in like-for-like sales – which does not include new stores – from increasingly frugal UK shoppers.

Ben Gordon, chief executive, said: “I think people will continue to spend on their babies above and beyond themselves,” adding there seemed to be “resilience in what we are doing”.

The real growth, though, was generated outside the UK where total sales surged almost 50 per cent. Mothercare has 603 non-UK shops in 50 countries, with its strongest presence in the Middle East. Mr Gordon said Mothercare was a brand that travelled well and the growth opportunities were enormous. The company is sticking to a plan to open 100 new shops each year.

In the UK, ripples from the collapse of Woolworths hit the chain as it was forced to cut the price of toys to compete with closing-down sales. Mr Gordon said Mothercare did little other unusual promotional activity and gross margins remained “broadly in line” over the period. He declined to say whether Mothercare was interested in buying Woolworths’ Ladybird children’s clothing brand.

Mothercare, which bought the Early Learning Centre in 2007, has enjoyed a strong run in recent years and doubled profits in the first half of the year. Although sales growth has slowed since then, the company said it was keeping a close grip on stock, sourcing and costs, and was on track to meet the market’s full-year profit expectations.

The shares, which have outperformed the sector by 13 per cent in the past three months, rose 4½p to 375¾p.

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