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Mothercare Achieves Modest Profits Amid Sales Downturn


Mothercare Achieves Modest Profits Amid Sales Downturn

As highlighted in its pre-close trading update, Mothercare has managed to remain “slightly” profitable despite a drop in retail revenue.

The baby retail chain disclosed that its adjusted EBITDA for the fiscal year ending 30th March showed a minor increase compared to the £6.7 million recorded in the previous year, meeting the expectations of the market.

Based on preliminary figures, total global retail sales through franchise partners amounted to £281 million for the period, marking a 13% decline from the preceding year.

Mothercare attributed this sales decrease to challenging market conditions in the Middle East, which account for 41% of its overall retail sales, whereas sales in the UK experienced an uptick from the previous year.

Despite reporting a net debt of £14.7 million, the company emphasized that the uptrend in EBITDA signaled an enhancement in the fundamental profitability of the enterprise.

Clive Whiley, the chairman of Mothercare, mentioned: “Given the external challenges impacting several of our operational territories, our primary focus lies in providing support to our franchise partners, a move that will ultimately bolster our own operations. We are also ramping up our endeavors to regain our customer base and are dedicated to maximizing the worldwide brand intellectual property of Mothercare.

“This situation offers a promising prospect for our partners, our workforce, and all stakeholders.”

In a recent development, Poundland was forced to remove its ‘Motherland’ signage from a new store following objections from Mothercare, citing brand similarity and issuing a cease and desist directive.

Poundland had inaugurated a flagship store in Biggleswade, Bedfordshire, christened ‘Motherland’ due to its vast assortment of baby and children’s attire. Nevertheless, Mothercare intervened due to concerns over brand resemblance.

Image Source: jax10289 / Shutterstock

The article Mothercare Counts Slight Profit Despite Sales Decline was first published on Voguish.Life.

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