Mothercare, the maternity specialist, revealed strong interim results and has unveiled plans to take advantage of property market conditions to reshape key parts of its store portfolio.
Mothercare said underlying group profit before tax rose 11.1% to £10m on sales up 7.9% to £387.3m. Like-for-likes grew 4% in the UK and 1% internationally.
Following completion of the first phase of its property strategy, Mothercare will now exploit the fact that 50% of its leases expire within the next three years and a weak property market to open parenting centres - housing the full range of Mothercare and Early Learning Centre ranges and concessions - rationalise the high street chain and open “landmark” shops.
Parenting centres at present account for 40% of UK store space and 65% of profit.
Another 31 will be opened over three years, including 10 in the current year, and the intention is to have 120 altogether. “In the current property market and with the destination appeal of our two brands we are able to obtain advantageous lease terms and enter key catchments that have previously been difficult to access profitably,” the retailer said.
Mothercare will address 90 “lower profit” high street shops as leases expire. Mothercare said: “We plan to move these stores to more profitable out-of-town locations, seek to renegotiate rentals or, if this can’t be achieved, close these stores.”
Mothercare has also identified 12 locations for “landmark” stores in high footfall locations such as city centres and shopping malls.
Mothercare chief executive Ben Gordon said: “With the strength of our two global brands, our rapidly growing international platform, a reducing UK cost base and debt-free business, we are well placed as we enter the important second half.”