Mothercare sees “significant improvement” in profits
Mothercare’s ongoing move into an asset-light, global franchising business looks to be paying off big time. The parent/baby/child products retailer has seen a “significant improvement” in profitability for the 52-weeks to 26 March. In real terms that means the year ago’s loss of £21.5 million turns into a £12.1 million profit. EBITDA hit £12 million from £2.2 million a year ago.
International retail sales by franchise partners, mostly across Europe and Asia, rose 7.5% to £385.3 million from £358.6 million in FY2021 but remained significantly impacted by Covid-19 at around 25% down on the total retail sales for similar territories in the year before the pandemic.
Online retail sales now represent 11% of total retail sales, slightly down on the 12% for last year, “reflecting lower levels of Covid-19 restrictions on store openings, yet still well ahead of the levels achieved in the period prior to the pandemic”.
In the first 21 weeks of FY23 franchise partner sales rose to £135 million from £117 million, excluding Russia (£150 million including Russia).
That return to profitability comes after Mothercare shuttered its UK stores in 2019. Mothercare products continue to be sold in Boots stores, which signed a franchise deal in 2020.
Mothercare also said its overall revenues were impacted by its decision to exit the Russian market in March, following the invasion of Ukraine.
The firm said it will “continue pursuing international growth over the next five years while remaining “mindful of the inflationary global economic environment.”
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