Mountain Warehouse is preparing to move into two more countries, the Netherlands and the Czech Republic, after the company continued to expand with a sales rise of 19.3 percent to £91.6 million (€102.4m-$122.2m) in the six months ended on Aug. 27.
The British outdoor retailer's international sales jumped by 50 percent in the six-month period, which is the first half of its fiscal year, to make up about 25 percent of its turnover. The retailer's online sales climbed by 18.5 percent, representing 20 percent of its turnover. Mountain Warehouse reported pre-tax profit of £4.7 million (€5.3m-$6.3m) for the first half, up by 18.0 percent from the year-ago period.
The company, which sells mostly private label products, opened 18 stores in the six months, ending up with about 280 outlets in seven countries: the U.K., Ireland, Poland, Germany, Austria, the U.S. and Canada. The new stores include eight U.K. locations and ten in foreign cities such as Poznan (Poland), Winnipeg (Canada) and Limerick (Ireland), expanding the foreign network to about 70 stores.
The retail group, created by Mark Neale 20 years ago, intends to open another ten stores in the second half of the current fiscal year – two of them were actually opened earlier this month in Oxford and Southwold. Mountain Warehouse should get into the Dutch and Czech markets in the first half of next year, through organic store openings and with the same concept as in the U.K. Mountain Warehouse is also pursuing its international expansion online, using country-specific websites in Austria, Canada, the U.S., Germany, Poland and France.
Neale told Retail Week that the company's target is to generate about half of its sales outside the U.K. Brexit and the fact that Mountain Warehouse buys many products in U.S. dollars makes it all the more interesting for the company to diversify abroad. Neale previously stated that he saw potential for 300 stores around the U.K., implying a similar number in other markets and ambitions to more than double the total estate.
At the same time, the company has decided to roll out its own Zakti brand in Mountain Warehouse stores across the U.K. This range was launched two years ago to capitalize on the athleisure trend, and has apparently been well-received. The group has five standalone Zakti stores for the time being, but selling it also at Mountain Warehouse will vastly increase the brand's reach, while enabling the outdoor stores to widen their target group and become less dependent on the weather.
Last year, Mountain Warehouse studied plans for an initial public offering (IPO) that was projected to value the company at about £200 million (€223.5m-$266.7m). Neale said at the time that he had never been fully convinced that it was the right way forward, and concerns around Britain's exit from the European Union made it easier to drop the plans. Neale had teamed up with other managers in November 2013 to regain the company's control from private equity owners, and the retailer is apparently able to finance its further expansion without an IPO.
Retail Week reports that Neale actually has one more plan with the launch a concept called Neon Sheep, selling a colorful mix of cheap gifts, stationery and household items. The first Neon Sheep stores were opened in Ealing and Basingstoke, apparently taking inspiration from stores like Tiger, Hema and Smiggle. Like at Mountain Warehouse, the products are directly sourced by the group itself.