Mothercare sales decline amid Middle East challenges, ends Boots distribution deal

Mothercare plc has issued a pre-close trading update for the 52-week period ending March 29, 2025 reporting unaudited retail sales of 231 million pound, an 18 percent decline from the previous year, primarily due to ongoing challenges in Middle Eastern markets.

Adjusted EBITDA is expected to be approximately 3.5 million pounds, aligning with market expectations, but down from 6.9 million pounds in the prior year.

Chairman Clive Whiley emphasized the company's resilience and ongoing discussions with potential strategic partners to restore growth and achieve core objectives. “Our results for last year reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East,” Whiley said.

“However, the de-leveraged business resulting from the recent India joint venture and refinancing, together with the ongoing support of our lender and pension trustees, is enabling us to continue to explore the full bandwidth of growth opportunities through connections with other businesses, the development of our branded product ranges and licensing within and beyond our existing perimeters,” he added.

The reduction in sales is largely attributed to the persistent uncertainty affecting franchise partners in the Middle East, leading to a decrease in store numbers from 124 to 77 over the year.

Additionally, the company is ending its exclusive distribution relationship with Boots in the UK by the end of 2025, aiming to explore new partnerships that better align with its brand strategy.

Despite these challenges, Mothercare has managed to reduce its net borrowings to 3.7 million pounds, down from 14.7 million pounds the previous year, aided by a recent joint venture in India and refinancing efforts.