Mothercare said global franchise retail sales declined sharply in the year to 28 March 2026, as the end of its UK partnership with Boots and continued instability across parts of the Middle East weighed on trading. In a pre-close update covering the 52-week period, the company reported unaudited retail sales through franchise partners of £180 million ($242 million), down 22% year on year, or 19% on a constant-currency basis.
The retailer—now operating as an asset-light franchisor—also reported weaker profitability. Adjusted EBITDA was approximately £1.25 million, compared with £3.5 million the year before. The company estimated that the recent conflict in the Middle East reduced EBITDA by around £0.1 million.
Balance sheet pressure increased during the year. Net borrowings rose to £5.7 million at FY26 year-end, up from £3.7 million in March 2025.
Clive Whiley, chairman of Mothercare, said the Mothercare FY26 results reflected the operational challenges faced by partners in a key region. “Our results for last year reflect the impact of the continuing uncertainty on our franchise partners’ operations in the Middle East, where any longer-term impact upon supply chains remains unclear at this stage, and the underlying profitability and cash generation of our asset-light franchise system.”
Mothercare said performance was more resilient outside the most affected markets. Excluding both the Middle East and the UK, like-for-like retail sales across its remaining franchise network were positive for the full year, suggesting underlying demand for the brand held up in other territories.
In the UK, the group reiterated that it still sees long-term opportunity, but is looking for a new partner following the conclusion of the Boots arrangement.
The company also said its financial position had not materially changed since refinancing its debt facilities in February 2026, a process that also deferred additional contributions to its pension schemes. Mothercare’s pension deficit was estimated at £35 million at 31 December 2025, broadly unchanged.
Whiley said the refinancing provided breathing space to pursue options to monetise the brand and scale operations again. “The full refinancing of our debt facilities in February 2026 has bought additional time to engineer a more comprehensive solution to harvest the value of the brand IP and the significant operational gearing available to an expanded business. In these circumstances, the recent financial performance has been usefully resilient as we look to FY27, whilst acknowledging the impact of the continuing disruption from events in the Middle East
“Given the external factors influencing some of the Company’s key operating markets, our immediate priority remains to support our franchise partners, ultimately for the benefit of our own underlying business, where the strength of the Mothercare brand endures. We remain in discussions with several parties to restore critical mass, a process greatly assisted by the recent alignment of the first-charge debt instrument with our equity.”
Looking ahead, the company indicated that stabilising partner operations and rebuilding scale remain central to its plans, with the Mothercare FY26 results underscoring how geopolitical disruption and partnership changes can quickly affect an international franchise model.
