Mothercare emerging as ‘sustainable, international franchise brand’

Retailer reports full year results, confirms brand will become available in Boots stores and online from the autumn.

Mothecare is emerging from the impact of the COVID-19 pandemic in “better shape than we went into it” according to its chairman, with the retailer continuing to reduce costs and improve its efficiency.

The company used its full year results announcement to confirm that the Mothercare brand would become available in Boots stores and online from the autumn. The franchise partnership will see Boots opening dedicated Mothercare and premium nursery zones in ten stores by November 13.

In addition, Mothercare has also secured a 20-year franchise agreement with the Alshaya Group – its most significant franchise partner.

Other highlights from the 52-week period included the successful implementation of a new operating model. This involved transitioning the business to refocus on brand management and design, development and sourcing of product to support international franchise partners.

It now serves 791 stores across 40 countries.

For the 52 weeks to March 28 2020, Mothercare reported a loss of £7.2 million – a vast improvement on the £21.1 million loss in 2019. Total profit for the year was £14.4 million – up from a £97.0 million loss in 2019.

When it comes to current trading, in the first 28 weeks of FY21, the group’s franchise partners – all of which were affected by COVID-19 lockdowns – had recorded total retail sales of £145.8m, representing a 39% decline year on year on a continuing operations basis.

Mothercare currently estimates that 95% of its partners’ global retail locations are now open, from a low point of 27% in April 2020.

“We have diligently managed our way through to mitigate the impact of the COVID-19 pandemic during this period of global crisis, and we emerge in better shape than we went into it,” commented Clive Whiley, chairman of Mothercare. “We continue to reduce costs and improve our efficiency. We are excited to launch our new UK and Ireland franchise with Boots, restoring the Mothercare brand to its home territory.

“We have entered into a new 20 year franchise agreement with Alshaya, our largest partner. We have successfully rolled out our innovative, working capital light arrangements with our manufacturing and franchise partners.”

Clive continued: “We are now singularly focused upon building Mothercare as a global brand, both in our existing territories and beyond. We are confident with these foundations now in place Mothercare can move forward as a profitable and cash generative international franchise business, generating revenues through an asset-light model in some 40 international territories.”

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