Mothercare plans to add 150 outlets in India; five-year target

Mothercare plans to add 150 outlets in India; five-year target
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First Published: Fri, Dec 10 2010. 12 48 AM IST
Updated: Fri, Dec 10 2010. 12 48 AM IST
New Delhi : UK-based Mothercare Plc, a specialist retailer targeting mothers-to-be and babies, plans to add 150 individual stores and so-called shop-in-shops in India over the next five years in one of the group’s largest expansion drives.
“It is one of the most exciting markets for us and it has got huge potential,” Ben Gordon, chief executive officer of Mothercare, said in an interview on Thursday.
Gordon declined to specify an investment figure. He said the company is yet to determine how many of the stores would be in the standalone format and how many of them would shop-in-shops, or outlets within larger stores. The company plans to open 70 stores in India by March 2011.
Mothercare operates in India through a joint venture with New Delhi-based real estate firm DLF Ltd as well as through a franchisee arrangement with the country’s largest department store operator, Shoppers Stop Ltd.
Mothercare operates 54 stores in India, 25 of them standalone through the DLF joint venture and 29 in the shop-in-shop format in Shoppers Stop outlets.
Gordon is in New Delhi along with a team of investors and independent retail analysts that the company has brought to India to showcase its global business opportunities.
“We are at a kind of an inflection point in our growth story. For the first time, international sales exceeded the UK sales and we wanted our UK investors to really understand our international business,” Gordon said. “And the best way of understanding the international business is go to one of the countries and see what it is like.”
Gordon says the company picked India to showcase to its investors because it is “one of the most exciting stories”.
Mothercare is seeking to double its overseas sales to £1 billion (Rs7,150 crore) in the next four years. According to Gordon, the real growth potential for the company lies in the international markets.
“Three quarters of a million babies are born in the UK every year and we have a big business there,” he said. “There are 130 million babies born outside the UK every year —99.5% of the babies are born outside the UK. Therefore, the opportunity for Mothercare is immense, internationally.”
Mothercare entered India four years ago through a franchisee arrangement with Shoppers Stop.
Earlier this year, it formed the joint venture with DLF in which it holds a 30% stake.
Gordon said Mothercare has traditionally operated in the international markets through franchisees and India is one of the few exceptions.
“We are in 54 countries and we have done JVs of this nature only in India, China and Australia,” he said.
The company is happy with the current joint venture, and has no plans to increase its sharholding in it.
Mothercare sources 50% of its clothing from India and the remaining 50% from China. However, the company has only 10 Mothercare stores in China where it entered two years ago.
“The Mothercare brand is better known in India than in China,” Gordon said.
rasul.b@livemint.com
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First Published: Fri, Dec 10 2010. 12 48 AM IST
More Topics: Mothercare | Expansion | India | Baby care | Tesco |