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Peak performance at Mountain Warehouse as profits reach £2m

Discount outdoor chain Mountain Warehouse is considering the sale of the majority stake in the business after predicting that profits will rise four-fold to £2 million this year.

Own-brand product and skiwear sales have helped to push sales above £17m.

Restructuring specialist BDO Stoy Hayward has been appointed to examine exit opportunities for NBGI Private Equity, which owns 51% of the company, four and a half years after it invested in the business.

Like-for-like sales at the 33-store chain rose 13.9% in the four weeks to December 31. Internet sales, which make up about 10% of the total, rocketed by 97%.

Overall, like-for-likes from March 1 to December 31 2006 were up 12.3%, with profit before tax expected to hit £2m for the year to February 28 2007, four times more than last year.

Managing director Mark Neale said the business's low pricing strategy and development of its own-brand offer had increased profitability. "The introduction of own brands such as Mountain Life, Parallel and Snapdragon have gone from 10% of our total product three years ago to 65%. We see this growing to about 80% over the next two years. We also want to develop the footwear side, which is only about 15% at the moment."

Neale said the business also plans to more than double its store portfolio, which is mostly factory outlet shops. It is aiming for 80 stores by 2010, mainly in market town high streets.

He said private equity companies had already shown interest in the business, and did not rule out an MBO or buy-in from other operators in the sector.

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