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Mothercare losses widen in the year of the pandemic and remain bright despite continued volatility

Mothercare’s return to health was interrupted by a recent pandemic, and the company’s results from 1952 to March 27 showed far greater losses. Despite saying, “We are very optimistic about the future,” mother and child product specialists have included a “going concern assumption” warning in the event of a difficult trading environment. rice field.

Mother care

The company, which has transformed its retail business into a brand-owned business, said it had an annual statutory loss of £ 21.5 million, well above £ 8.5 million a year ago. Revenue was £ 85.8m, down significantly from £ 164.7m in the previous year as Covid damaged the business.

“There is significant uncertainty that raises serious doubts about whether the group can function as a going concern,” he added, as the effects of the pandemic continue.

However, the going concern problem relies on many “ifs” and goes beyond the modeled ones only “when trading conditions deteriorate” and “when additional costs or cash management programs cannot be implemented”. Occurs. This can mean that “at some point in the working capital cycle, there is insufficient cash and you need to renegotiate with the lender.

It is not yet known if the warning is more than a statutory obligation or possible. However, the company’s performance reports were generally bright.

Last year saw “successful transformation to create a powerful platform for growth” and “sustainable, operational and low-capital growth focused on brand management and design, development and sourcing. We have moved our business to provide a platform. ” Products that support international franchise partners in more than 700 stores in 37 countries. “

In the UK, one important move was to establish boots As a local franchise partner Mother care A brand that will be available online with the boot store from the fall of 2020.

The business also said, “We see strong opportunities to grow in new areas.” [as] Mothercare is not yet included in seven of the world’s top 10 baby markets. “

And we look forward to “expanding brand reach … looking for opportunities for us to wholesale, license and online marketplaces.”

Looking at current transactions, it is estimated that more than 80% of our partner’s global retailers are currently open. But “in Russia, India, Indonesia and Malaysia, trade remains difficult as Covid-19 continues to influence scaffolding and consumer confidence.”

However, “based on mitigating the business impact of our company and our franchise partners as we progress this year, implementing new business models, significantly reducing cost structures, and eliminating significant legacy issues, our operating income Significant improvements are expected. This year. “

In the first 13 weeks of the new fiscal year, franchise partners, many of whom continue to be affected by the Covid-19 blockade, recorded total retail sales of £ 94m and adjusted for approximately £ 2.5m. Created EBITDA.

Chairman Clive Wheely said: “The past fiscal year was clearly a difficult year, but the pandemic has made great strides in the fundamental transformation of the Group.

“We expect 2022 to be a year of further progress as we focus on developing strategies and future plans to globally optimize Mothercare brands over the next five years. Pandemic in many regions of our franchise partners. These are exciting times as we are trying to accelerate the growth of our business and Mothercare brands without the distractions of the last three years, despite the ongoing impact. We are looking to a very optimistic future by establishing an efficient platform at. ”

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Mothercare losses widen in the year of the pandemic and remain bright despite continued volatility

Source link Mothercare losses widen in the year of the pandemic and remain bright despite continued volatility

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