Franchise Partner’s Retail Business Suspended in Russia

  • Mothercare raises EBITDA guidance due to one-off benefits and higher retail sales
  • Russian closures expected to impact results for the year to March 2023 by £6m
  • Covid-19 continues to affect franchise partners’ profitability
  • Online sales accounted for 10% of total retail sales, down from 12% in the previous financial year

Mothercare has announced that its expected EBITDA for the year ended 26 March 2022 is now between £11.5m and £12m, ahead of analysts’ expectations. The higher earnings are attributed to one-off benefits and increased retail sales. However, the company warned about the impact of closing its business in Russia. Mothercare’s franchise partner’s retail operations in Russia, which includes 116 stores and an online platform, have been suspended. This has led to a £5.5m contribution to adjusted EBITDA for the year. The company expects the closures to affect its results for the year ending March 2023 by £6m. Mothercare also mentioned that Covid-19 continues to impact all of its franchise partners’ profitability, leading to cost reductions and slower recovery. Online sales accounted for 10% of total retail sales, down from 12% in the previous financial year.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Mothercare’s financial performance, including EBITDA expectations, franchisee retail sales, the impact of Covid-19 and the suspension of its business in Russia. It also includes quotes from Clive Whiley, the chairman of Mothercare, discussing their plans for the future.
Noise Level: 6
Noise Justification: The article provides relevant information about Mothercare’s financial performance and the impact of the closure in Russia and Covid-19 on its business. However, it could benefit from more analysis or context on how these factors affect the industry as a whole and potential long-term consequences.
Financial Relevance: Yes
Financial Markets Impacted: Mothercare’s EBITDA, retail sales, and Russian operations
Financial Rating Justification: The article discusses Mothercare’s financial performance, including EBITDA expectations, the impact of Covid-19 on retail sales, and the closure of its business in Russia. It also mentions the potential impact on financial markets due to the suspension of sales in Russia.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.retailsector.co.uk