Wedoany.com Report-Jan.1, Mothercare has reported its interim results for the first half of the fiscal year, showing a significant decline in revenue and adjusted profitability. The UK-based retailer attributed the performance primarily to store closures in the Middle East and the planned exit from its partnership with Boots in the UK. On a like-for-like basis, retail sales decreased by 6%.

Store closures were instrumental in the decline in Mothercare’s global retail sales for H1 FY25.

The company operated 344 stores worldwide during the period, down from 440 the previous year. Total store square footage fell to 858,000 square feet from 1.1 million square feet. Online retail sales rose slightly and accounted for 11% of total retail sales, compared to 10% in the corresponding period of the prior fiscal year.

Revenue dropped 45% to £11.6 million, largely due to the end of the five-year exclusive partnership with Boots. Adjusted EBITDA decreased to £0.8 million from £1.7 million. The company recorded an adjusted operating loss of £0.5 million, compared to a £1.1 million profit in the prior period. The adjusted loss before taxation improved to £1.1 million from £1.4 million.

Net debt was reduced to £5.8 million by the end of the half-year, approximately one-third of the £17.1 million reported the previous year.

Clive Whiley, Mothercare chairman, said: “Mothercare is making good progress against our strategic priorities. After the strategic and operational challenges of the last few years, our performance in the first half shows that Mothercare has been stabilised as a smaller and cash generative business with greatly reduced debt. Our new partnerships with Reliance in South Asia and Ebebek in Türkiye are now bearing fruit, underlining the intrinsic value of and opportunity for our brand.”

Mothercare has advanced its joint venture with Reliance Brands, a subsidiary of Reliance Industries, for the South Asian market. This partnership, valued at approximately £30 million, grants Reliance Brands perpetual rights to use the Mothercare brand in India, Sri Lanka, Nepal, Bangladesh, and Bhutan. Reliance Brands targets retail sales of around £300 million within five years, supported by plans to open 50 new stores in 2026.

In Türkiye, Mothercare has entered a licensing agreement with Ebebek Mağazacılık, providing exclusive rights to use the brand for a decade. Ebebek operates nearly 280 stores and has recently expanded into the UK. The agreement also allows Mothercare to purchase and rebrand products sourced by Ebebek for sale outside Türkiye.

The company expects to maintain a generally cash-neutral position over the next 12 months. Retail sales and income are anticipated to exceed FY26 levels, particularly in Türkiye and India. Mothercare plans to expand its global presence by enhancing branded product ranges and pursuing licensing opportunities within and beyond current markets.

Discussions with various parties focus on monetising operational efficiencies, increasing business volumes to boost income, and capitalising on growth from the South Asian joint venture and Türkiye licensing agreement. These initiatives aim to enhance the brand’s intellectual property value, improve profitability, and strengthen financial stability.

Despite the closure of 50 stores in the Middle East over the past year, Mothercare does not expect further significant closures, as profitability improves following the clearance of old inventory.

Clive Whiley added: “From this position of relative strength, our key focus for 2026 is to pursue options to rebuild our scale and operations both in the UK and globally, alongside pursuing the refinancing of our existing debt financing facilities. This is an exciting prospect for our partners, our colleagues and all our stakeholders as we look towards the new year and those opportunities ahead.”