Mothercare boost for Softlogic retail biz

Softlogic Holdings Plc is boosting its profitable retail business via an exclusive deal with world renowned brand Mothercare of UK.

The diversified blue chip will launch a mega 7,500 square feet three-level UK-style Mothercare showroom and affiliated brand Early Learning Centre at No.7, R.A. De Mel Mawatha, Colombo 5.

The move is part of Softlogic’s strategy of further enhancing the retail offering to better harness opportunities in tandem with the rising per capita income as well as tourist inflow.

Softlogic’s growing retail portfolio includes several other world famous brands such as Levis, Nike, Giordano, and Mango, apart from consumer electronics and IT products including Nokia and Dell, among others.

The official entry of Mothercare in to Sri Lanka via Softlogic has elicited widespread interest. Even before the opening of the flagship store, the Facebook page had drawn thousands of likes from Sri Lankan consumers. Previously Mothercare products in Sri Lanka had been marketed by various retailers without a formal arrangement.

Mothercare is a specialist retailer of products for mothers-to-be, babies and children up to the age of eight. Mothercare opened its first store in 1961 in Surrey and today offers a wide range of maternity and children’s clothing, furniture and home furnishings, bedding, feeding, bathing, travel equipment and toys through its retail operations in the United Kingdom, and also operates internationally through franchises in Europe, the Middle East, Africa and the Far East under the ‘Mothercare’ brand name.

In 1H of FY13, the Group’s worldwide sales amounted to Sterling Pounds 637 million, up by 2%. International sales amounted to SP 375 million.

Softlogic’s retail arm continues to be one of the key thrust areas for the Softlogic Group, posting a 247% revenue growth during 2010/11 to Rs. 2 billion.

The Retail Division contributed Rs. 241 m to the Group operating profits whilst profit after tax was Rs. 180 million (up from Rs. 18 million in FY10), out of consolidated figure of Rs. 971 million. In the first half of F13, the sector reported a pre-tax profit of Rs. 74 million despite the negative impact from currency depreciation and increase in finance cost.

It plans to have a retail footprint of 250 stores in the short to medium term whilst during the second quarter the 156th store was opened.

The sector, which is heavily dependent on imports, suffered from a dip in volumes amidst the rise in prices, hampering affordability. This is expected to be a short term effect until consumers get used to the new pricing structure. However, with the per capita GDP of the country expected to reach the US$ 4,000 mark, its focus remains on the Retail Sector as the planned expansion strategy remains intact.

The Group’s outlets also display a comprehensive bouquet of brands such as Panasonic, Samsung, Onida, Cornell, Ignis, and the Candy range of consumer electronics, offering customers the ‘Best Brands with the Best Deals.’

The Group also continued to add new furniture and accessory models in the furnishing sector, to enhance its wide variety of international brands including, King Koil, Sheridan, and Caroma. The Group is also cultivating local craftsmanship by ushering locally-crafted furniture and accessories into its furniture segment.

The Mothercare and Early Learning Centre brands are synonymous with children and parenting. Both brands carry with them a reputation for specialism, quality, safety and innovation in providing products and services for mothers, mothers-to-be, babies and young children. Both brands are passionate about their commitment to offering customers a multi-channel shopping environment through retail stores, catalogues and the internet, so that parents can meet the needs and aspirations for their children, worldwide.

Whilst the principal office of the group is in the United Kingdom, it has invested significant resources in its sourcing and supply chain operations in Shanghai, Hong Kong, Bangalore, Singapore and the United Arab Emirates so that it can better understand and serve customers’ needs. Mothercare buying and sourcing teams develop innovative products with manufacturers; supply chain partners help it deliver them through warehouses to stores around the world where finally retail and customer teams deliver specialist service to its customers.

The business started its mail order business in 1962. In 1972, Mothercare first became a public company, and in 1982 Mothercare merged with the Habitat chain of retailers to form Habitat Mothercare plc. In 1984, Mothercare began to expand internationally through entering into franchise arrangements with select partners in chosen countries. In 1986, Habitat Mothercare plc merged with British Home Stores plc. During the 1990s the merged group was rationalised. In 2000, Mothercare became the sole brand and the holding company’s name was changed to Mothercare plc.

In June 2007, the group acquired Chelsea Stores Holdings Limited, the owner of the Early Learning Centre (ELC) brand.

ELC was founded in 1974 originally as a mail order business offering toys and books with educational content. The first ELC retail store opened in Reading later the same year. In 1985, ELC was acquired by John Menzies Plc, which continued to expand the estate and ELC became a well-known high street brand. In September 2001, ELC was the subject of a management buyout, during which ELC streamlined its operations, exited non-profitable product categories and stores and grew its sourcing operation in Asia.







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