Mothercare back on steady footing

MOTHERCARE has seen its profits shoot up after shifting its focus from discounting to charging full-price, its boss claimed.

The chain reported pre-tax profits were up 5.4pc to £5.8m, while underlying profits more than doubled in the first half of the year from £3.3m in 2014 to £7m.

The results are a positive step for the babywear retailer, which has seen five years of decline.

In January 2014, Mothercare saw its shares crash 31pc after its failed Christmas discounting strategy led it to issue a profit warning. It saw sales fall 6.1pc over the festive period, and the following month its then chief executive, Simon Calver, left.

Current boss Mark Newton-Jones said the hard work to return to profitability was paying off, and the secret to its change in fortunes was switching focus from selling cutprice products to offering higher quality, pricier items and better service.

Newton-Jones, formerly of Shop Direct, said yesterday: ‘We’re a business in turnaround and this is our trajectory to get back in profit. ‘This is a change of identity, very much so. In recent years we were trying to compete with generalists and discounters – supermarkets for example. But, actually, we’re the only specialist for toddler and baby products in the market, and that’s something we’ve sought to build on.

‘Now we’re getting back to the roots of Mothercare and offering high-quality products and a better range, and with that comes higher margins.

‘And on top of that we can give advice and support to help mums and dads as they bring a new one into the world.’

In addition to the chain’s soulsearching to boost sales, its stores are in the process of getting a £60m makeover, with 20pc to be completed by next week.

Mothercare has seen a boost in online sales of 22pc thanks to its improved mobile and tablet services. It has also put iPads in its shops so that after customers try out vital kit such as prams and car seats in person, they can then place orders to get the bulky items delivered.

Yesterday its shares closed 10p lower at 219.75p.