Mothercare shares surge as baby goods seller returns to profitability
Shares in Mothercare surged by more than 60 per cent today after the British baby-care products retailer said it had swung back into profitability over the past financial year.
The Watford headquartered company posted profits of £12.1m for the financial year 2022, compared to a £21.5m loss in FY 2021.
The retailer said the “significant improvement” in its financial results reflects its “ongoing strategic transformation into an asset-light, global franchising business”.
The return to profitability comes after Mothercare shuttered it UK stores in 2019 following the collapse of its British subsidiary.
Mothercare products continue to be sold by British pharmacy chain Boots, which signed a franchise deal with the baby goods seller in 2020.
Sales by Mothercare’s international franchise partners in Europe and Asia increased 7.5 per cent year on year, to £385.3m.
Mothercare said its overall revenues were impacted by its decision to exit the Russian market in March, following Russia’s invasion of Ukraine.
The firm said it will continue pursuing international growth over the next five years whilst remaining “mindful of the inflationary global economic environment.”
Mothercare chairman Clive Whiley said: “The year under review was bookended by the Covid-19 pandemic and the Ukraine conflict, however, despite the persistence of these difficult global challenges, we have begun to demonstrate the potential of Mothercare as an asset light global franchising business.”