By Lisa Barrington
LONDON (Reuters) - British baby goods retailer Mothercare more than doubled half-year profit as it revamps its loss-making domestic business and plans further international expansion.
Underlying profit before tax rose 112 percent to 7.0 million pounds in the six months to Oct. 10, after improved margins cut losses in Britain.
Mothercare more than halved its UK business losses to 6.1 million pounds, while underlying profit in its international business fell 14.2 percent to 21.7 million pounds, on adverse currency moves and reduced consumer spending due to economic pressures.
Sales at international stores open more than a year were down 2.3 percent year-on-year.
Mothercare is trying to revive its business in Britain, which has suffered heavy losses as margins have been eroded over the past five years partly due to cheaper competition from rivals such as Primark (part of AB Foods (L:ABF)) and online retailers like Amazon (O:AMZN).
Sales at UK stores open more than a year, including online sales, rose 3.8 percent, it said, with total UK sales up 0.4 percent to 236.6 million pounds.In September last year, Chief Executive Mark Newton-Jones tapped investors for 100 million pounds to help fund a restructuring which will include new technology for online sales and gradual refurbishment of stores in Britain.
A year into the turnaround plan, Newton-Jones said Mothercare's British business is attracting a broader base of customer and was no longer trying to compete with supermarkets at the lowest-cost end of the market.
Rather, it is increasing the quality of its offering and targeting an "aspirational" customer base.
Mothercare's international retail space grew 6.6 percent in the past six months to account for 66 percent of total retail space and 61 percent of total sales.
The company will further expand its international presence. "Rather than retrench where economies are becoming tougher, we are taking the polar opposite approach and we are continuing to put space down," Newton-Jones said.
"When the economies do all settle down, we will be in a great position for growth."
Shares in the London-listed retailer were up 0.5 percent by 1000 GMT, in line with UK mid-range stocks as a whole.
