Mamas & Papas reports another loss but e-sales increase
today Jan 16, 2019
Mamas & Papas continued to struggle in its latest year, accounts filed at Companies House for its UK and Ireland retail business show. The nursery products retailer suffered in a wider sector malaise with major rival Mothercare also facing hard times in the challenging environment.
The company reported an operating loss of £4.3 million in the 12 months to last April, its second consecutive loss-making year (the loss was £4.4 million in the prior year), as turnover dropped by as much as £5.2 million to just under £73 million.
The company blamed the need to discount aggressively and also cited its store closures in the previous year for its lower turnover. But it said it’s comfortable with the lower sales in the circumstances.
The company also said it’s seeing a higher percentage of its sales happening online with e-shopping now adding up to 30% of its total turnover and the figure increasing every year.
Mamas & Papas added that it’s heavily focused on controlling costs and also has the right management team to take it forward. It has appointed new directors for trading, marketing, digital and overseas business, as well as a new CFO who only joined in November.
But analysts weren’t convinced that all is well with Amy Higginbotham, Retail Analyst at GlobalData, saying that "the baby and nursery specialist has suffered declining sales since 2011, suggesting that its problems are more deep-rooted.”
The analyst said it’s facing “intensified” competition from “pureplays and non-specialists such as Amazon and John Lewis, as well as newcomers such as PreciousLittleOne, and this continues to put pressure on nursery specialists.”
She thinks that in a competitive promotional market, “Mamas & Papas must work harder to justify its premium price points. [Such companies] must promote the superior quality of their own-brand products and expertise of their staff in-store if they wish to gain the trust of expectant and new parents, and maintain their market share.”
She also thinks that the radical downsizing of the chain (it has closed more than half of its stores since 2014 and now has only 31) could “make it more difficult for Mamas & Papas to capitalise on the collapse of Toys R Us/Babies R Us and Dunelm’s closure of the Kiddicare website, as consumers switch to more accessible competitors such as grocers.”
However, she praised the opening of its first concession in a Next Home store in Bristol, where it is “hoping to take advantage of the retailers’ shared customer base and reduce the costs of operating a new store.”
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