Mothercare’s turnaround programme has continued to reap dividends, with overall profits doubling and its troublesome UK business moving closer to profitability.
Losses in the UK more than halved to £6.1m as the baby goods retailer closed 16 underperforming stores and continued its extensive refurbishment programme. Mothercare is trying to create a more modern feel with its new-look stores, which include cafes and play areas.
Under its chief executive, Mark Newton-Jones, the retailer is moving away from a discount-heavy approach that has damaged its UK business. Previously less than 60% of its products were sold at full price; that proportion has risen to 70%, helping UK sales growth more than double in the seven months to 10 October to 3.8%.
“Our work to return the UK business to profitability continues to pay off ... Our new store format is going down well with customers, and these refurbished stores are delivering encouraging uplifts in both sales and profit. But there is still more work to do,” said Newton-Jones.
Mothercare’s profitable international business – where it has more than 1,000 stores in Europe, the Middle East and Asia – offset the UK losses with an underlying profit of £21.7m, despite economic volatility and currency fluctuations.
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