Mothercare gross sales stay considerably under pre-Covid ranges and the retailer has warned that it might take ‘plenty of seasons’ for client confidence to return.
The London-listed firm, which not has shops within the UK however has a franchise operation abroad with 800 retailers, has additionally mentioned the closure of its 116 Russian shops will proceed to take a toll on its efficiency.
Its unaudited outcomes present franchisee retail gross sales rose by 7 per cent to £385million previously yr, of which practically 1 / 4, or £88million, got here from Russia.
Mothercare noticed gross sales edge greater in comparison with 2020, however they’re nonetheless under pre-pandemic
Retailer gross sales are nonetheless round 25 per cent down in comparison with the yr earlier than the pandemic, whereas on-line retail gross sales – which make about 10 per cent of the entire, stay above pre-Covid ranges.
The group mentioned it doesn’t know when it is going to be capable of reopen its Russian operations and the money shortfall means it won’t be able to pay cash to plug its pension black gap this month.
Nonetheless, it expects adjusted revenue earlier than nasties to return in forward of analysts’ expectations of between £11.5million and £12million – of which £5.5million is from Russia.
Within the present monetary yr, the corporate expects to take a £6million hit from the suspension of its Russian operations however working revenue to nonetheless exceed £10million, excluding contributions from the nation.
‘We method the brand new monetary yr with a level of cautious confidence, however that we’ve fully excluded Russia from our forecasts given the uncertainty round when shops could reopen,’ the corporate mentioned.
‘Our Russian franchise accomplice has continued to pay the salaries of the workforce in full regardless of the suspension of gross sales available in the market.
‘We’re making the mandatory changes to our value base to take care of our service and prices for our franchise companions and this monetary yr will probably be impacted by the timing variations as we regulate our value base.’
Mothercare shut down all its remaining UK shops in 2020 after practically 60 years of buying and selling, with the lack of 2,500 jobs. Prospects in Britain can nonetheless purchase a few of its merchandise in Boots.
The group, which is making an attempt to show its enterprise round by upgrading its providing, mentioned its first revamped vary launched in January had been effectively obtained, however famous that challenges remained.
‘The preliminary suggestions has been very constructive however we’re conscious that lots of our territories nonetheless face challenges together with ongoing Covid-19 restrictions and the necessity to clear previous stock from earlier seasons because of supressed demand,’ the group mentioned.
‘We additionally admire that it might take plenty of seasons for client confidence to return and thus gross sales to completely mirror the improved ranges. It’s subsequently troublesome at this early stage to mission ahead and quantify the resultant affect on retail gross sales.’
Mothercare shares had been down 1.5 per cent at 10.7p in morning buying and selling.