Bottom Line: Calver’s turnaround begins to blossom

 
Elizabeth Fournier

IT COULD have gone so differently. Two years ago – around the time it launched a review of its struggling British business – Mothercare’s shares were trading at just 148p. Dreadful UK sales were dragging down decent growth in international markets, and the group had swung to a pre-tax loss of £81.4m in the first half of 2011. Things didn’t look good.

But then management tried something clever – they brought in brand and online specialist Simon Calver, then boss of Amazon’s LoveFilm. At the time, he seemed like a long shot; no conventional retail experience and a focus on e-commerce that seemed at odds with Mothercare’s vast stores full of expensive baby gear. But – like a hesitant first-time mother – he seemed to know exactly what to do. Within weeks stores were being closed, and today just 237 remain in the UK, compared to more than 300 before the restructuring started. Scaling back the UK operation (which is still loss-making) has meant the company can grow where it needs to – in places like Dubai and Shanghai which helped boost like-for-like international sales by 4.8 per cent.

He’s also rolled out a vastly improved online presence, with click-and-collect available across all its stores in time for Christmas, helping online sales rise 9.5 per cent.

Investors have responded by sending shares above 400p – making yesterday’s slight dip look insignificant in comparison. There’s still some way to go, but Calver is starting to look like a very safe pair of hands.