Mothercare continues to face a downturn in sales attributed to challenges in the Middle East.
- Despite this, they have formed a significant partnership with Indian conglomerate Reliance.
- Global retail sales saw a notable drop of 13 per cent year-over-year.
- Nevertheless, the company reported improved profitability and reduced debt.
- Mothercare is optimistic about the positive impact of recent strategic moves.
Mothercare, a prominent brand in baby products, is experiencing a continued decline in sales as it navigates the aftermath of the pandemic. The company identifies ongoing difficulties in Middle Eastern markets as a primary reason for this slump.
In a move towards recovery, Mothercare has established a new partnership with Reliance, a major Indian conglomerate. This development is viewed as a strategic effort to stabilise and eventually boost the brand’s performance across international markets.
Reported figures show a decline in global retail sales, falling from £322.7 million in 2023 to £280 million in 2024, marking a 13 per cent decrease. Despite the dip in sales, the company registered a profit of £3.3 million, a notable turnaround from the previous year’s minimal loss.
Further positive financial strides include surpassing analyst expectations with an adjusted EBITDA of £6.9 million, slightly above the previous year’s £6.7 million. Additionally, Mothercare announced a reduction in secured debt facilities to £8 million and secured a £16 million investment from Reliance Brands.
Chairman Clive Whiley expressed confidence in a press statement, emphasising the focus on regaining ‘critical mass’ and achieving core objectives. He described this phase as an ‘exciting prospect’ for stakeholders as the company emerges from recent upheavals.
Mothercare’s retail strategy involves selling through Boots in the UK and operating numerous franchised stores worldwide. The brand has been executing a transformation plan since 2020, including closing 79 UK sites and significant job cuts due to the pandemic’s impact.
Despite the current sales challenges, Mothercare remains committed to its strategic adjustments, incurring higher redundancy costs this year at £0.5 million compared to £0.3 million previously. This reflects ongoing efforts to streamline operations and foster growth.
Mothercare remains hopeful for recovery through strategic partnerships and operational adjustments despite current sales challenges.
