Mountain Warehouse profits shine in all weather

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Outdoor chain Mountain Warehouse plans to open a further 40 stores after demand for waterproofs and wellies in last year’s washout summer sent profits soaring by 75 per cent.

The group announced pre-tax profits of £7.6 million for the year to the end of February, saying it also benefited from the scaling back of struggling rivals Blacks and Millets.

Chief executive Mark Neale said sales had continued their positive trend, up 10 per cent on a like-for-like basis in the year so far.

Neale, who founded the business 15 years ago with a single store in Swindon, added: “The product mix has changed massively and whereas last year we were selling waterproofs and wellies, last week we were selling thousands of pairs of shorts and sunglasses.”

Mountain Warehouse plans to hire another 150 staff this year after growing its workforce to 1,200 during the year. The firm opened 15 outlets last year, taking its estate to 160, and plans to hit the 200 mark in two years’ time.

Neale said the growing popularity of internet shopping also helped group sales grow 17 per cent, to £75m, but bricks and mortar shops in good locations were still key. Sales increased 10.1 per cent on a like-for-like basis.

The firm is to open a shop in Aviemore this month and Neale said his Fort William outlet is a top performer despite competition from other outdoor retailers in the Highland town.

He told The Scotsman the group would like to grow its presence north of the Border but was finding it hard to secure premises in honeypot towns such as Oban and Pitlochry.

Mountain Warehouse has started stocking higher end outdoor clothing as it gains the confidence of consumers and suppliers.

The retailer is also capitalising on the struggles of outdoor goods chains Blacks and Millets, which fell into administration in 2012. The chains were bought out by JD Sports Fashion for £20m, but its attempts to turn the brands around have involved closing around half of their stores.

Neale said: “Where Blacks and Millets have closed shops, that definitely helps. But having said that we’re in lots of places where they never were. The weather has been pretty favourable to us. We like a bit of cold and wet because we sell stuff to keep you warm and dry.

“Despite all the talk about the death of the high street, in our experience there is still plenty of life in many towns up and down the country.”

Mountain Warehouse is backed by the private equity arm of Lloyds Banking Group, Neale’s fourth private equity partner. He remains the majority shareholder and said that, although he has considered flotation, he is happy with the current set-up and would probably seek a similar arrangement should Lloyds wish to sell up.