High street staple Mothercare has announced plans to aggressively rebuild its scale both in the UK and internationally, despite revealing another period of losses and a sharp drop in sales.
Financial Performance and Trading Pressures
The London-listed baby products retailer reported a pre-tax loss of £1.4 million for the 26 weeks to 27 September. This represents a slight improvement on the £1.8 million loss recorded for the same period a year earlier.
However, sales through its global network of franchise partners plummeted by 25% to £90.7 million. On a constant currency basis, the decline was 22%. The company attributed this significant drop to store closures in the Middle East and the impending end of its exclusive partnership with Boots on the UK high street.
Underlying earnings also took a major hit, more than halving to £800,000, down from £1.7 million the previous year.
Stabilisation and Strategic Shifts
Chairman Clive Whiley stated that despite these ongoing trading pressures, the group had achieved a degree of stabilisation. This was thanks to a concerted effort to downsize the business and slash its debt burden.
The firm's net debt was dramatically reduced to £5.8 million, a substantial fall from the £17.1 million reported in September of the previous year.
"From this position of relative strength our key focus for 2026 is to pursue options to rebuild our scale and operations both in the UK and globally," Mr Whiley said. This ambition runs alongside plans to refinance the company's existing debt facilities.
Refinancing and Future Leadership
The group confirmed it is actively considering refinancing options after breaching the terms of a key lending agreement. This technical breach means a loan with its main lender is now repayable on demand, though Mothercare stressed it continues to benefit from the lender's support and has positive, regular discussions.
The company added that it has sufficient cash to trade for the foreseeable future.
On the strategic front, Mothercare pointed to recent international deals beginning to bear fruit, including a £30 million joint venture with Reliance Brands UK in South Asia and a licence agreement in Turkey.
Leadership remains a focus, with the search for a new chief executive ongoing. Day-to-day management is currently handled by the chief financial officer and the operating board under Mr Whiley's oversight.
