Mothercare posts drop in sales as it begins refinancing discussions
Mothercare has seen a 13% decline in its net worldwide retail sales by franchise partners to £281 million.
In a pre-close trading update for the 53 weeks to 30 March, the company said it delivered an adjusted EBITDA marginally above the £6.7 million it achieved in the previous year, which is in line with market expectations.
While retail sales increased in the UK and Indonesia in the period, Mothercare said sales in the Middle East region, which account for 41% of sales, were the most challenging.
Clive Whiley, chairman of Mothercare, said: “As highlighted in my last chairman’s statement, it has been six years of hard work and transformative change for the group and, on behalf of the board, I would like to thank our colleagues across the business, alongside our pension trustees and all other stakeholders for their unstinting support during these difficult times.
“That support and the resilience we have built into the business throughout this journey, allows us to deal with the major challenges we have faced and Mothercare operations would not be in the profitable and cash generative position we are today without it.”
Mothercare said it has fully drawn its existing loan facility and has therefore commenced refinancing discussions with its lender “to vary, renegotiate or refinance” the facility. It added: “We are well advanced in looking at various financing alternatives (including equity and equity linked structures) to give us both additional flexibility and reduced cash financing costs.”
