Mother and baby products retailer Mothercare said it saw a significant opportunity to develop a global wholesale business as a fourth channel to market as it posted an 11% increase in first-half profit.
The firm, which trades from 389 UK stores, 694, mainly franchise, international stores, and has an on-line business, also hiked its interim dividend by 19.6% today and said it was confident about prospects for the second half.
'While this wholesale is a relatively small business within the group, with annual sales of about £10m sterling, we believe it has the potential to be a significant growth stream for the future, particularly in countries where we don't have a store presence, ' CEO Ben Gordon said.
He declined to say how big a business he thought global sales to third-party retailers could become.
Britain's retailers have been struggling in the recession and although there have been signs recently that a recovery is underway many remain cautious about prospects for 2010.
Mothercare has coped better than most, helped by selling essential products to parents, strong growth in emerging markets, home shopping and the Internet, and the integration of the Early Learning Centre (ELC) brand it bought in 2007.
The firm plans to open a further 33 of its largest format out-of-town parenting centres in the UK by the end of 2011, creating 400 new jobs, and sees scope for 120.
At the same time it wants to rationalise over 90 lower-profit high street stores which have lease expiries over the next three years. These stores will be re-sited, have their rents renegotiated, or closed.
Mothercare forecast its property strategy would deliver £10m of annual savings by 2012. International franchising remains the major growth engine for the group.
It plans to open 115 new stores in the year to end-March 2010, with major expansion planned for India and China and an entry into Australia and South Africa.
Mothercare made an underlying pretax profit of £10m in the 28 weeks to October 10, up from £9m the same time last year. Sales increased 7.9% to £387.3m, with UK sales up 2.7% and international sales up 29.6%.
