Our vision and strategy

Our vision is to be the leading global retailer for parents and young children.

1
Become a digitally led business

Consumers are increasingly researching and buying product online, with a growing demand for 24/7 availability. Our customers are no different, they are predominantly savvy 25-35 year olds who are connected digitally, via social media and on mobile. In the UK, our online sales are growing and account for nearly a third of our UK total sales with click-and-collect becoming increasingly popular with customers who are looking for convenience and flexibility.

UK online sales growth

18.4%

in FY2015

Online sales

30.2%

of total UK sales

We intend to invest further in out digital offering, improving customer experience on our website, expanding mobile, video and social capability while also integrating more effectively our digital and in-stores customer experience through click-and-collect, improving CRM and building a strong database for marketing. We aim to:

  • improve our product delivery proposition by enabling customers to track their orders, while also providing greater convenience and choice of delivery and collection points,
  • to drive online customer retention and personalisation, and
  • to simplify customers’ online journey and enhance customer experience through improved photo and video presentation and customer reviews.

Internationally, our Franchise Partners’ online presence is still at an early stage, reflecting the markets in which they operate. We currently have transactional web-sites in 10 countries, which should grow over the medium term. We aim to facilitate the extension of our Franchise Partners’ online presence to most of our International markets and, potentially, more widely to markets which are currently without Franchise Partners.

2
Supported by a modern retail estate

Following a full review of the UK store estate, we now have a blueprint, which will form the basis for managing our UK store portfolio. Having closed 184 under-performing stores over FY2012, FY2013, FY2014 and FY2015 our focus is now shifting to the proactive management of our store estate. This will be through a combination of store closures, relocations and refurbishments to best meet the needs of our customers.

UK store numbers Mar 15: Mothercare 175, ELC 14; and space numbers Mar 15: Mothercare 1,631, ELC 27

This exercise will leave us with a core UK estate of 1.6 million sq. ft. and approximately 110 profitable out-of-town stores, approximately 50 profitable in-town stores and approximately 120 store-in-store Early Learning Centre inserts across our Mothercare stores.

In addition, our refurbishment programme will ensure that the store estate is consistent in presentation and is modern and fit for purpose. This will include:

  • modern fixtures to enable increased product density and consistent product presentation,
  • the introduction of digital screens and video walls, iPads, customer Wi-Fi and click-and-collect to all our stores, and
  • bringing all stores to a good level of finish in terms of general decoration, branding, lighting, signeage and facilities, including toilets, feeding and changing rooms.

We have already made a start with our stores in Gateshead, Solihull and Lisburn.

3
Offering style, quality and innovation in product and great service

A modern store estate needs to be complimented by great product and service. We aim to shorten product lead times and restructure our product architecture of “Good, Better and Best” whilst offering good value across all price points. This will include supplementing our own ranges with exclusive third-party products and new brands. We have already started to improve the quality and newness of our product range both in-store and online with the introduction of brands like Mamas & Papas, Converse, Mamalicious and iCandy while also extending some our more successful own ranges.

Our refurbished stores will also benefit from improved merchandising and presentation of product while online will benefit from photo and video presentation and delivery services to a customer’s home, place of work, closest store or local collection point. We are also investing in training for management and store teams to improve quality and consistency of customer service. Our recently launched credit finance proposition in partnership with a third-party credit provider will complement services like personal shopping, online booking of specialist services and activities in-store.

All of these enhancements in product and service will be extended to our International business.

4
Stabilise and recapture gross margin

We aim to become a full price retailer and stabilise margins in the UK by reducing the level of discounting and markdown activity. Our scale both in the UK and Internationally should allow us to work in partnership with our supplier base, which will improve our cash margin and allow us to further in the business. We will achieve that by:

  • ensuring costs prices and supplier terms are appropriate and by building on established supplier relationships and leveraging our market position,
  • further improving stock management and reducing inventory,
  • introducing more unique and exclusive products, particularly in Home & Travel, to differentiate our product offering,
  • less discounting and more full price sales, and
  • driving upselling both in-store and online.
5
Running a lean organisation while investing for the future

Since May 2012, we have made considerable progress towards our target of reducing non-store operating costs by approximately £20 million. We have achieved this through restructuring and reorganisation to ensure tight management of central costs at our head office and overseas sourcing offices. This has included a reduction in staff and an improvement in sourcing efficiencies.

It is our intention to maintain a lean cost organisation by continuing improvements in working capital efficiency through the management of inventory levels, supplier relationships and active management of our resources, investment and cost base.

6
Expanding further Internationally

Our successful International business now spans four regions – Europe, Asia, Middle East & Africa and Latin America, with more than 40 Franchise Partners having stores in over 60 countries.

Over the last few years our International business has delivered double digit store and space growth. These long-standing and stable Franchise Partnerships offer in-depth knowledge of each market and continue to offer good growth prospects.

International store numbers Mar 15: Mothercare 908, ELC 365; and space numbers Mar 15: Mothercare 2,505 Sq.ft(k), ELC 389 Sq.ft(k)

We believe, the investment in the UK will in turn also help to support and grow our International business. Improved store formats, product offering and online initiatives will not only benefit the UK, but will also provide our International Franchise Partners with a roadmap for the future helping them to improve on their already successful businesses.