July 16, 2009 / 7:07 AM / 11 years ago

Mothercare bucks retail gloom

LONDON (Reuters) - Mothercare (MTC.L), the baby products retailer, bucked the recession with improved first-quarter sales driven by a growing international business and a weaker currency.

Customers leave a Mothercare shop in London October 11, 2008. REUTERS/Suzanne Plunkett

The group, which trades from 1,014 stores in 51 countries, said group sales rose 9.4 percent in the 15 weeks to July 10, with its international division leading the way with a 32.7 percent rise in retail sales.

Underlying UK sales rose 5.1 percent, while sales at Direct in Home, its home delivery business, grew 17.4 percent.

The group opened 30 new stores overseas during the quarter — mainly in Eastern Europe and the Middle East — and now has 639.

“The international business continues to grow rapidly and was boosted by the weakness of sterling,” the company said in a statement.

“Whilst this has been a positive start to the year, we continue to manage the business tightly in an uncertain global consumer environment.”

Many retailers are struggling as cash-strapped consumers think twice before making a purchase. Unemployment hit a 12-year high in May and continues to rise.

But Mothercare has bucked the trend, benefiting from selling essential products for parents, a fast-growing Internet and home shopping business and the successful integration of the Early Learning Centre brand it purchased in 2007.

Shares in Mothercare, which have risen in value by 60 percent this year, closed at 532 pence on Wednesday, valuing the group at around 465 million pounds.

Mothercare is expected to report a pretax profit of 40 million pounds for the year to the end of March 2010, according to a Reuters Estimates poll of 12 analysts.

Editing by James Davey and Jason Neely

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