Mothercare slides to £1.8m loss as sales fall further

Baby products brand Mothercare has slipped to a loss for the past half-year after another significant slump in sales.

The retailer said it was knocked by tough trading in the Middle East and efforts by franchise partners to work through old inventory.

Mothercare, which sells its ranges through retail giant Boots in the UK and has franchised stores across the globe, has been working on a transformation plan for a number of years.

Bosses said on Monday that they are approaching 2025 with “a renewed and growing sense of confidence” after a recent period of “turmoil”.

It reported that turnover dropped by 27.5% to £21 million for the 26 weeks to September 28, compared with the same period last year.

It said this followed a 12% fall in global retail sales by franchise partners, with the decline driven by a poor performance in Middle Eastern markets.

Mothercare said its main retail partner in the region is having to adapt its offering due to “evolving consumer behaviour, pursuant to ongoing fiscal and legislative changes”.

The business reported a £1.8 million pre-tax loss for the half-year, swinging from a £1.7 million pre-tax profit a year earlier, after it was impacted by lower sales and high financing costs.

Clive Whiley, chairman of the group, said: “Our results continue to reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East.

“We are now focused upon restoring critical mass alongside delivering our remaining core objectives.

“This is an exciting prospect for all our partners, colleagues and stakeholders as we can finally leave behind the turmoil of recent years that Mothercare has successfully come through.”

As part of the group’s transformation plan, it struck a £30 million joint venture deal with Reliance Brands UK, covering the brand in India, Nepal, Sri Lanka, Bhutan and Bangladesh.

In October, it also announced a fresh refinancing deal.

Mr Whiley said the joint venture and refinancing deals are acting as “a springboard” to drive further growth.

Mothercare shares were down 3.6% in early trading.