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Mothercare PLC on Monday reported decreased annual earnings, citing a decline in retail sales by franchise trading partners, partly due to continued uncertainty in the Middle East. Mothercare reported adjusted earnings before interest, taxes, depreciation and amortisation of £1.3 million for the year ended March 28, down from £3.5 million in the year ended March 29, 2025. The brand for parents and young children, in a pre-close trading update, which also announced unaudited world retail sales by franchise partners of £180 million, marking a 22% decline on the previous financial year. Net borrowing totalled £5.7 million at March 28, up from £3.7 million at the end of the prior year. The Watford-based company pointed to the termination of its exclusive distribution relationship with Boots at the end of 2025 as one reason for the decreases. The group also noted the impact of continuing uncertainty in the Middle East, and estimated the impact in the last month of the Iran War at £100,000. Excluding the Middle East and the UK, however, Mothercare reported an increase in total retail sales for the financial year up to March 2026. Previously, in February, the group announced that it had entered into financing arrangements with a consortium of investors, increasing its debt facilities to by £500,000 to £8.5 million. The Monday update noted that there was ‘no material change’ to the group’s financial position since then. Clive Whiley, Mothercare’s chair, commented: ‘Our results for last year reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East, where any longer-term impact upon supply chains remains unclear at this stage, and the underlying profitability and cash generation of our asset-light franchise system. The full refinancing of our debt facilities in February 2026 has bought additional time to engineer a more comprehensive solution to harvest the value of the brand IP and the significant operational gearing available to an expanded business. In these circumstances the recent financial performance has been usefully resilient as we look to FY27, whilst acknowledging the impact of the continuing disruption from events in the Middle East.’ ‘Given the external factors influencing some of the company’s key operating markets, our immediate priority remains to support our franchise partners ultimately for the benefit of our own underlying business, where the strength of the Mothercare brand endures. ‘We remain in discussions with several parties to restore critical mass, a process greatly assisted by the recent alignment of the first-charge debt instrument with our equity,’ he added. Shares in Mothercare closed down 25% at 1.05 pence on Monday afternoon in London. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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