othercare’s troubles confirmed no indicators of slowing, because the retailer blamed “persevering with challenges” for its Center Japanese franchisees for sliding gross sales.
The enterprise, which licenses the Mothercare model overseas because the UK excessive road arm collapsed in 2020, noticed gross sales fall by 15% within the six months to mid-September, to £132.5 million.
That follows a 12 months the place income crashed by 88% to £1.1 million, regardless of an increase in gross sales. Mothercare mentioned it believes it may make annual income of £10 million in “extra regular circumstances”.
Mothercare says it’s in dialogue with potential lenders “to make sure that the group has ample and applicable financing for the longer term”. The corporate is paying an rate of interest of 19.2% on its predominant mortgage facility, and continues to warn that its mounting curiosity funds create “materials uncertainty” about the way forward for the enterprise.
The group added that its predominant lender stays supportive about the opportunity of a covenant waiver if it may’t repay all its money owed.
Chairman Clive Whiley mentioned: “Now we have a compelling market alternative. Mothercare stays in an unparalleled place of being a extremely trusted British heritage model, with a major alternative to leverage this model fairness and develop our world presence past our present franchise community.
“There’s nonetheless work to do, however we’re excited concerning the future prospects for Mothercare as we go away behind the turmoil of latest years.”
The shares misplaced one other 15.7% to three.5p. The enterprise, as soon as valued at £7.5 billion, is now price lower than £20 million.