Mothercare, the renowned children’s retailer, has released its latest set of financial results as it embarks on a franchise deal with Boots. The company has undergone significant changes, shifting from a retailer to a brand owner and franchisor. Despite facing challenges in recent years, Mothercare has emerged as a sustainable and capital-light international franchise brand.

In terms of financial performance, Mothercare reported net profits of £14.4 million, a significant improvement compared to the previous year’s £97 million loss. However, its turnover decreased from £199.8 million to £164.7 million, and it incurred a pre-tax loss of £6.4 million, although narrower than the £18 million loss in the previous year.

While these figures may not fully reflect the company’s transformation, the current situation is of utmost importance. Mothercare reports that its franchise partners saw a 39% decline in total retail sales in the first 28 weeks of the current financial year, largely due to the impact of COVID-19 lockdowns. However, the closure of physical stores during the peak of the pandemic was somewhat offset by online platforms. Currently, approximately 95% of its partners’ global retail locations are open, a significant improvement from a low point of 27% in April.

Globally, Mothercare has witnessed a strong recovery in the Middle East following the reopening of stores, with the exception of the UAE, which has been affected by reduced tourism. The Russian market has experienced a slower recovery due to government restrictions, leading to lower footfall and performance. India and Indonesia, two key markets, continue to face challenges due to the ongoing impact of COVID-19 on consumer confidence and footfall.

The recently initiated franchise deal with Boots in the UK is expected to have a vital role in Mothercare’s future. Chairman Clive Whiley expresses enthusiasm about this partnership, stating that it will reestablish the Mothercare brand in its home territory. Furthermore, the company has entered into a new 20-year franchise agreement with Alshaya, its largest partner, ensuring stability and visibility for the future.

Overall, Mothercare’s performance shows promising signs of improvement and resilience. The company has effectively navigated through the challenges posed by the COVID-19 pandemic and is now focused on cost reduction and efficiency improvement. With the Boots franchise deal already underway and strong partnerships in key global markets, Mothercare is positioning itself for a stable and successful future.

Useful links:
Mothercare Official Website
Boots Official Website