Baby products brand Mothercare has reported a drop in sales as it continues to struggle with post-pandemic demand, but has said its new deal with Indian giant reliance will help to shape a turnaround.
The retailer said the decline was mainly due to “continuing challenges” in Middle East markets.
It told markets this morning that worldwide retail sales fell by 13 per cent during the year, from £322.7m in 2023 to £280m in 2024.
Profit for the year was £3.3m, up from a loss of £0.1m last year after the company re-financed its debt. Net borrowings increased by £2.3m year on year, to £14.7m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) beat analyst expectations and came in at £6.9m, just up from £6.7m last year.
The company noted that it had reduced its secured debt facilities to £8m, and received £16m from Reliance Brands, adding that a “de-leveraged Mothercare can once more move forward with confidence and invest appropriately in the company’s future development.”
Clive Whiley, chair of Mothercare, said: “We are now focused upon restoring critical mass alongside delivering our remaining core objectives. This is an exciting prospect for our partners, our colleagues and all our stakeholders alike as we finally leave behind the turmoil of recent years.”
Mothercare, which sells its ranges through retail giant Boots in the UK and has franchised stores across the globe, has been working on a transformation plan for a number of years.
The London-listed business undertook a major restructure at the start of 2020 which saw it shut its 79 UK stores and shed hundreds of jobs.
The pandemic had a big impact on the group with its franchise partners having to clear old inventory, reduce costs and lower the level of investment it can make in Mothercare.
With sales still down, Mothercare has continued to cut jobs. It stated it handed out £0.5m in redundancy payments in 2024, up from £0.3m the year before.