Mothercare is backing embellished, more detailed and higher quality clothing while it seeks to ramp up the fashion offer across its high street stores to grow sales and profits in its clothing arm.
The maternity and kidswear specialist is upping the quantity of its “more heavily designed” styles across its UK store portfolio, increasing both the amount of items in these styles and boosting the number of stores these items are available in. As part of the move, Mothercare has extended its Little Bird and Baby K collections to half of the retailer’s 183 Mothercare stores, up from a handful previously.
Mothercare chief executive Mark Newton-Jones told Drapers the retailer is selling three times more of the embellished, expensive pieces than more basic styles.
“We’re finding a better rate of sale on the more heavily designed product. The better quality fabrics and detailed trims are selling faster than the more basic products. Anything at the top of our price pyramid is selling treble that of the basics. People are looking for something more special,” he added.
Newton-Jones said the retailer will be shifting towards the higher end of its price architecture to support the growth of Mothercare’s clothing arm.
“We will be shifting more product into that ‘better and best’ category, as well as introducing more branded product.”
As part of the retailer’s turnaround plan, Newton-Jones said he plans to increase the percentage ratio of clothing in Mothercare’s high street stores to improve the margin.
High street stores typically comprise 40% clothing, 40% homeware and 20% toys. In a trial of six stores during the half, clothing was increased to 80% of the store, homeware 15% and toys 5% of the shop. As a result, the margin in those shops increased by 4%.
Newton-Jones said he would roll this concept out to more high street locations in 2015, but declined to specify how many.
As previously reported by Drapers, Mothercare introduced selected clothing brands into 11 of its stores at the end of October and Newton-Jones said the initial reaction has been “positive”. It currently has 10 brands in stores including Converse and Bestseller Group’s maternity label Mamalicious.
“We only have two weeks to go on but I’m pleased with the performance. We want to continue to upgrade our clothing and fashion designs as well as adding new brands,” he added.
Underlying group pre-tax profit increased by 65% to £3.3m at Mothercare for the 28 weeks to October 11, while UK losses narrowed to £13.5m from £14.9m year on year.
During the first half, UK like-for-like sales were up by 1.5%, while international like-for-like sales rose 4.9%. However, total sales were down in both markets. Total international sales fell to £397.5m from £399.3m during the previous half and UK sales dropped to £235.6m from £238.4m as 14 loss-making stores were closed.
In October Mothercare announced it had received acceptances for roughly 95% of its rights issue, which will help turn around its UK business. Out of the 79.94 million shares from the rights issue, more than 75.6 million shares were taken up.