Mothercare looks abroad with times hard in high streets

Mothercare today said strong growth overseas would offset a "more challenging" consumer climate at home, where it is planning a move from high street stores to out-of-town outlets.

The baby care retailer's international arm had a record after sales jumped 21% to £490.9 million, helped by the launch of Mothercare in Australia and its Early Learning Centre chain in South Africa.

Mothercare, which has 1,115 stores in 52 countries, had its fourth successive year of like-for-like sales growth in the UK but is "planning cautiously" for more sluggish conditions. Underlying annual profits for the year to March 31 rose 17% to £52 million, in line with City forecasts.

Mothercare is driving its overseas operations through franchising, which allows it to profit from royalties on international sales for the use of its brands without heavy capital investment.

The group is targeting India and China as key growth markets after forming joint ventures with partners in the countries. Mothercare expects to have 70 stores in India open by the end of the year, with a medium-term target of 200.

In the UK, where Mothercare's Spin pushchair the ELC's Retro Robot have been best sellers, the firm is shifting away from lower-profit town centre stores towards out-of-town centres, planning 120 of the new outlets.

The group is also ahead of schedule on plans to close stores or renegotiate leases on under-performing shops and expects a bigger than guided £16.1 million annual gain from its property strategy by the end of 2012.

While sluggish conditions are likely to linger on the high street, Mothercare has also identified its wholesaling business as a key area of growth and has signed a deal with retailer Boots to supply childrenswear to 400 stores from September.