The Baby King

Though birth rates are declining, and merchants to the spoon-fed set are facing hard times, one fairly young company is beating the baby slump. Britain's Mothercare, Ltd., started in 1961 by Chairman Selim Zilkha, runs a unique chain of one-stop, self-service supermarkets that sell maternity wares and everything that a baby needs from cradle through kindergarten. Zilkha's 143 shops spread across England to Germany, Austria and Switzerland. He is opening two more stores this month and plans another 120 shops in Britain. Zilkha, whose ambition is to become the global king of the baby-care business, jetted last week to Tokyo, looking for partners to open new stores, and Toronto to conduct his own market research.

Now 45, Zilkha is a multinational entrepreneur. An Iraqi-born Jew, he was educated at Williams College in Massachusetts, is a U.S. citizen, and lives in England. After spending 15 years in the Manhattan, London and Paris offices of his family's banking business, he decided that "I wanted to do something more exciting." Backed by the family's money, he bought some drugstores and tacked on maternity and child-care sections. He soon concluded that mothers prefer stores that sell only baby products and have clerks who are expert in such matters as maternity undergarments and baby carriages. "Mothers want specialists to tell them just what Baby needs," says Zilkha.

Zilkha opened a group of white-and-orange-painted specialty shops and filled them with moderately priced items, neatly organized by size and age groups. The products range from food-warming containers and easy-to-mix milk food to diapers, bouncing cradles, plastic building blocks and tricycles for five-year-olds. For housebound mothers, Zilkha packs the same 850 items into a catalogue that is mailed to 2.3 million homes yearly.

All Mothercare-label products are made by other companies, eliminating the overhead of a manufacturing operation. Through market research, Zilkha picks store sites in communities that have an annual birth rate of at least 1,200. He also uses a computerized stock system that issues weekly reports on what items are selling best, calculates how many hangers a supplier will need and guarantees that each store will maintain a five-or six-week inventory. Mothercare tots up annual sales of about $ 12 million, and the company reported last week that net profits in the past six months climbed 61 % over the equivalent period of a year ago, to $464,000.

Zilkha, a divorced father of two teenagers, operates out of a spartan office in an old confectionery factory and holds board meetings in the back seat of his chauffeur-driven Rolls-Royce. Besides Zilkha, the company's only directors are his brother Ezra, chairman of Manhattan's Fidelity International Bank, and Mothercare's personnel and property officer. Zilkha himself has made a fortune on babies. Last July the company went public, and his holdings of Mothercare's stock are now worth $13 million.

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