Mothercare pauses Russian ops, loses up to a quarter of global sales
Mothercare has become the latest international retailer to suspend all business in Russia, but unlike some, that will hit its bottom line hard.
It will be a big blow to Mothercare’s slowly reviving business as Russia represents around 20%-25% of its worldwide retail sales. And it was previously expected to contribute around £0.5 million every month to group profit.
The mother and baby products specialist joins a long list of high-profile Western brands to exit the country in protest against Russia’s invasion of Ukraine on 24 February.
In a brief statement to the London Stock Exchange on Wednesday, the UK-based retailer confirmed its local partner “will be immediately pausing operations” in some 120 stores and online.
Mothercare joins Burberry, ASOS, H&M, Next, JD Sports, and Boohoo in putting operations in Russia on hold, alongside a host of other major brands. Last week, French luxury giants LVMH, Hermes and Chanel also joined the list.
In late November, Mothercare said it had only just returned to profit after a bruising pandemic and was “close to unlocking its true potential”.
The company, which now operates as a brand-owning business that franchises out its retail operations, reported a pre-tax profit of £3.6 million for the 26 weeks ended 25 September, compared with a loss of £13.2 million for the same period a year earlier, following the “significant negative impact Covid-19 still has had over the period”.
Despite the London-listed company's turnover slipping slightly to £41.7 million for the 26 weeks from £44.4 million in the previous 28 weeks, that was good as 10% of its partners' global stores remained shut at the end of the first half.
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