Mothercare losses widen after major restructuring

Baby products group Mothercare saw its losses widen for the past six months after sales slumped following its major restructure which it said is almost complete.

The chain shut its 79 UK stores in January as part of a transformation plan to become an international franchise operation.

Mothercare subsequently sealed a deal with Boots to sell goods across the chain and maintain its brand in the UK.

The company revealed that it fell to a pre-tax loss of £14 million for the 28 weeks to October 10, compared with a £5.7 million loss for the same period last year.

Sales from continuing operations slid to £44.4 million, representing less than half of the £102 million it posted in the same period last year.

Mothercare said that Covid-19 led to an “unprecedented demand shock” in April as global restrictions shuttered the doors of its retail partners.

The group said that only 27% of its franchise partners’ locations remained open at the start of the period.

It said that it had “substantially recovered” since then but it had seen an aggregate loss of retail sales to its franchise partners worth about £145 million.

Clive Whiley, chairman of Mothercare, said: “The restructuring phase of Mothercare is now all but complete.

“The singular focus of the business is to return Mothercare to its rightful place as the leading global brand for parents and young children and to deliver the operational and financial performance commensurate with that leading position.

“We have diligently managed our way through this period of global crisis and we emerge in better shape than we went into it.”

Mothercare also told investors it had now secured a £19.5 million loan with Gordon Brothers Brands to help shore up its finances.

Shares in the company lifted 1.8% higher at 12.8p after early trading.