Mothercare warns of sharp profit fall as Middle East conflict takes its toll
Mothercare has warned that its profit for the 52 weeks to 28 March will be significantly below that of the previous year, citing long-term uncertainty in the Middle East and the more recent impact of conflict in the region.
In a pre-close trading update, the specialist brand for parents and young children said that EBITDA before adjusting items is now expected to be around £1.25 million, compared to the £3.5 million in the prior year. The company estimated the conflict’s impact in the final month of the period at approximately £0.1 million.
Subscribe to TRBMeanwhile, worldwide retail sales by franchise partners declined by 22%, or 19% at constant currency, to £180 million in the year.
The company attributed the performance to a range of issues, including the end of its exclusive distribution relationship with Boots at the end of 2025, foreign exchange headwinds, and prolonged uncertainty in its Middle Eastern markets, compounded by the Iran war in the final month of the period.
Clive Whiley, chairman of Mothercare, said: “Our results for last year reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East, where any longer-term impact upon supply chains remains unclear at this stage, and the underlying profitability and cash generation of our asset-light franchise system.”
Excluding the Middle East and the UK, total retail sales were positive on a like-for-like basis for the year to March 2026.
However, Mothercare said it continues to believe there is a greater opportunity for the brand and a new partner in the UK.
Looking ahead, Whiley said: “The full refinancing of our debt facilities in February 2026 has bought additional time to engineer a more comprehensive solution to harvest the value of the brand IP and the significant operational gearing available to an expanded business.
“In these circumstances the recent financial performance has been usefully resilient as we look to FY27, whilst acknowledging the impact of the continuing disruption from events in the Middle East.
“Given the external factors influencing some of the Company’s key operating markets, our immediate priority remains to support our franchise partners, ultimately for the benefit of our own underlying business, where the strength of the Mothercare brand endures.
“We remain in discussions with several parties to restore critical mass, a process greatly assisted by the recent alignment of the first-charge debt instrument with our equity.
