Mothercare has swung to a half-year loss after sales plunged more than a quarter.
The nursery specialist fell to a pre-tax loss of £1.4m in the 26 weeks to 28 September, down from a profit of £1.8m the year before.
Sales dropped 27% to £21m over the period as worldwide retail revenue from Mothercare’s franchise partners decreased 12% to £121.2m.
It attributed the drop to “a combination of the continuing uncertainty in the Middle East and the ongoing need for franchise partners to clear old inventory”.
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Mothercare revealed it was expanding the brand into several South Asian markets in October following a £30m joint venture with Reliance Brands.
The launch of Mothercare’s joint venture with Reliance Brands coincided with former CEO Mark Newton-Jones confirming his intention to step down as a non-executive director. The retailer said it would also look to appoint a new chief executive in due course “as a natural consequence of the multiple strategic discussions currently in train.”
The retailer’s chair Clive Whiley said: “We have immediately utilised this new India joint venture and refinancing as a springboard for a deleveraged Mothercare to explore the full bandwidth of growth opportunities through connections with other businesses, the development of our branded product ranges and licensing within and beyond our existing perimeters.
“Our results continue to reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East. We are now focused upon restoring critical mass alongside delivering our remaining core objectives.
“This is an exciting prospect for all our partners, colleagues and stakeholders as we can finally leave behind the turmoil of recent years that Mothercare has successfully come through.”
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