Baby Specialists Supply Something Special
Now here's a surprise. According to The Daily Telegraph, one of the U.K.'s best-known retailers has increased its full-year pre-tax profits "tenfold to £42.2m from £4.5m the previous year." Furthermore, "Sales rose by 6.9pc to £723.6m and it increased its dividend by 20.8pc to 14.5p a share."
The retailer under discussion is Mothercare, specialists in all the things that any family with a baby may either need or want. Once the only specialist baby retailer in the country, by the time former Disney executive Ben Gordon signed on in 2002 cash apparently had to be taken from the registers to pay bills and directors reportedly delivered stock to stores using their own cars.
Last year, however, Mothercare had recovered to take over its rival, Early Learning Centre. It is also, Mr. Gordon said, getting "into channels" by "turning ourselves from a retailer into a branded goods company. We take these goods and sell them through...traditional retail stores, the internet and third-party franchises."
This boils down to more than 400 stores in the U.K. plus more than 600 run by franchisees in some 51 countries. Online sales are said to have increased by 25.5 percent year-on-year. The Telegraph reports support from a new social networking website, gurgle.com, which uses the catchline "Baby stuff made simple."
Among the reasons Mr. Gordon cites for Mothercare's success are a tendency for British parents to have babies later in life and, therefore, to be "better off...and more aspirational for their baby." He also believes that people continue spending on their babies "long after they stop spending on themselves."
The newspaper didn't ask for Mr. Gordon's opinion on why parents are spending in Mothercare rather than the many other places selling baby goods these days. Certainly they are no longer the only option. Perhaps it just goes without saying that he believes Mothercare to be the best option.
Discussion questions: What do you think of the overall outlook for baby-specialist shops? What can baby specialists offer that general chains with baby lines cannot?