Mothercare swings to profit following one-off gain
Mothercare has swung to a total profit of £14.4 million in the year to 28 March from a loss of £97 million in the previous year after it benefited from a one-off gain on the loss of control of its UK business.
Meanwhile, revenue came in at £164.7 million compared to £199.8 million in the prior year as the retailer experienced a challenging second half when it was hit by supply chain constraints during its adminstration process as well as the impact of Covid-19.
Clive Whiley, Mothercare chairman, said: “We have diligently managed our way through to mitigate the impact of the Covid-19 pandemic during this period of global crisis, and we emerge in better shape than we went into it. We continue to reduce costs and improve our efficiency.”
Since the year-end, Mothercare’s franchise partners across the world have seen a 39% drop in retail sales to£145.8 million due to the impact of Covid-19 lockdowns. However, the company now estimates that 95% of its partners’ retail locations are now open compared to a low point of 27% in April.
Mothercare has recently launched a new UK and Ireland franchise with Boots to enable it to have its branded clothing, home and travel products sold in Boots stores. It has also entered into a new 20 year franchise agreement with long-standing franchise partner Alshaya.
Looking ahead, Whiley said: “We are now singularly focused upon building Mothercare as a global brand, both in our existing territories and beyond. We are confident with these foundations now in place Mothercare can move forward as a profitable and cash generative international franchise business, generating revenues through an asset-light model in some 40 international territories.
“This would not have been possible without the support of all of our stakeholders whom, on behalf of the board, I would like to thank for enabling us to get to this point. As a result, from today, Mothercare can look forward to a brighter and stable future once more.”
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