Mothercare’s strong position in the Middle East maternity market could be threatened as US counterpart, kidswear giant The Children’s Place, prepares to make its debut in the region.
The US retailer, which has over 1,000 stores in its domestic market, has signed a 10-year franchise deal with Apparel Group to open shops across the UAE, Kuwait, Qatar, Bahrain and Oman.
The first stores in the region will open this quarter in Saudi Arabia, where the franchisee is Fawaz Al Hokair to launch in Saudi Arabia.
The Children’s Place’s expansion will be unwelcome news for Mothercare, whose international business has continued to boom while its UK division has struggled. Continued international success is a key plank in new Mothercare chief executive Simon Calver’s turnaround plan.
Seymour Pierce analyst Freddie George warned: “Any competition is negative and they’ve [Mothercare] really had the market to themselves out there. They need to take this very seriously.”
Mothercare is eyeing opening 20 to 30 stores a year across the Middle East and Africa, where it already has 290 stores. It forecasts 10% growth in the region each year. More than half of Mothercare’s sales are generated overseas.
Apparel Group chairman Nilesh Ved laid down the gauntlet to Mothercare. He said: “There is a void in the Gulf States for children’s product and we are confident that The Children’s Place is the perfect brand to fill that void.”