Mothercare faces uncertain future as Middle East franchise closures loom

Mothercare disclosed that its future is "highly uncertain" after its principal Middle East franchise partner confirmed it will close the majority of its franchised outlets next year. The retailer described the move as a "heavy blow" and has launched an immediate strategic review, acknowledging it only has enough resources to continue trading for a limited number of months. The expected closures will cause a material reduction in the order book for 2027-28, leading to lower revenues, profits and cash flows.

Mothercare also reported a sales decline of over 40% in the year ending March 28, attributing the drop to regional conflict and the termination of its UK supply agreement with Boots. Chairman Clive Whiley emphasized the company's recent financial resilience but warned that the backdrop remains challenging, and the firm will keep seeking ways to preserve stakeholder value.