Mothercare pauses Russia operations, expects big sales hit

Mothercare has warned of a significant hit to its sales as it becomes the latest fashion retailer to put its Russian operations on hold.

In a brief statement to the stock market on Wednesday, the British maternity and childrenswear retailer said its entire business in Russia, including shipment of all products, has been suspended.

It said its local partner confirmed it will be immediately pausing operations in some 120 stores and online.

The Russian market currently represents a significant 20 to 25 percent of Mothercare’s retail sales, and was expected to contribute around 0.5 million pounds per month to group profit.

Mothercare joins the likes of H&M, Inditex, Asos and Burberry which have also placed their Russian operations on hold following the country’s invasion of Ukraine.

Road to recovery

It is a significant blow for Mothercare, which has undergone a major restructuring in recent years, only to then be hit hard by the pandemic.

But in its most recent trading update, for the six months to September 25, the company reported a profit before tax of 3.6 million pounds, swinging from a loss of 13.2 million pounds a year earlier.

Its turnover in that period dropped 6 percent to 41.7 million pounds.

Mothercare said at the time that it continued to be “heavily impacted” by the pandemic, with just over 10 percent of its partners’ global stores closed at the end of the period.

But the London-listed company was upbeat that the initiatives it has previously implemented to improve profitability have begun to “bear fruit”.

It said it was “well placed” for further improvements in performance as retail sales return to pre-pandemic levels across markets.