Mothercare’s re-birth

When Ben Gordon joined mother and baby product retailer Mothercare in December 2002 as CEO, the share price was languishing at 83p, it was "haemoriging market share to to the supermarkets and bogged down in supply chain problems",  according to The Times.

Fast forward 6 years, and Mothercare are reporting sales up 6.9%, profits up 12.4% and the share price is 423p, having well out-performed the FTSE 100 index. Here we look at some of the key factors in the re-birth of this problem baby.
 

1. Embracing online retailing

Mothercare have done a good job of embracing online as a reatail channel, rather than seeing it as a threat. You can browse in store and get advice, and then order from a wider range via the website. Online sales now account for 20% of all Mothercare's business

2. Added value acquisition

Buying other companies can often end up back-firing. Mothercare have done this well, by buying Early Learning Centre and integrating this. This works well by extending the brand offer both in terms of product offer, to be more educational, and in terms of age group by extending beyond babies into toddlers and older kids.

3. Overseas expansion

Over half the company's 1014 stores are now outside the UK, and like-for-like sales are growing more than four times quickly overseas as they are in the UK

4. Core product development

Mothercare have invested in rejuvenating their core ranges. A good example is the Baby K range, designed in conjunction with TV presenter Myleene Klass. This is a clever bit of brand association, with a well designed product offering (sausage) complemented by the emotional appeal of endorsement and input from a celebrity mum (sizzle).