M
othercare ’s troubles confirmed no indicators of slowing, because the retailer blamed “continuing challenges” for its Middle Eastern franchisees for sliding sales .
The business , which licenses the Mothercare model overseas for the reason that UK excessive avenue arm collapsed in 2020, noticed gross sales fall by 15% within the six months to mid-September, to £132.5 million.
That follows a 12 months the place profits crashed by 88% to £1.1 million, regardless of an increase in gross sales. Mothercare stated it believes it may well make annual earnings of £10 million in “more normal circumstances”.
Mothercare says it’s in dialogue with potential lenders “to ensure that the group has adequate and appropriate financing for the future”. The firm is paying an rate of interest of 19.2% on its most important mortgage facility, and continues to warn that its mounting curiosity funds create “material uncertainty” about the way forward for the enterprise.
The group added that its most important lender stays supportive about the potential of a covenant waiver if it may well’t repay all its money owed.
Chairman Clive Whiley stated: “We have a compelling market alternative. Mothercare stays in an unparalleled place of being a extremely trusted British heritage model, with a big alternative to leverage this model fairness and develop our world presence past our present franchise community.
“There continues to be work to do, however we’re excited concerning the future prospects for Mothercare as we go away behind the turmoil of latest years.”
The shares misplaced one other 15.7% to three.5p. The enterprise, as soon as valued at £7.5 billion, is now value lower than £20 million.
