Maternity and childrenswear specialist Mothercare has reported a loss in its most recent financial year ended March 25.

The group, which has undergone a major transformation in recent years, made a net loss of 0.1 million pounds compared to a profit of 12.1 million pounds the prior year.

That came as group turnover dropped 11 percent to 73.1 million pounds, while retail sales from franchise partners fell 16 percent to 322.7 million pounds.

Mothercare has undergone a major restructuring in recent years only to then be impacted by the pandemic and a significant hit to sales linked to its exit from the Russian market following the country’s invasion of Ukraine.

In 2019, the retailer put its UK business into administration, which resulted in it closing all 79 of its stores and repositioning itself as a global franchising business.

Mothercare chair Clive Whiley said Friday he was “pleased” with the progress the company has made in transforming itself “towards an asset-light, global franchising business”.

Mothercare close to refinancing

He said Mothercare remains in an “unparalleled position of being a highly trusted British heritage brand, with a significant opportunity to leverage this brand equity and grow our global presence beyond our existing franchise network”.

Looking at more recent trading, group franchise sales in the first half of FY24 fell 15.5 percent to 132.5 million pounds, which it said was largely due to “continuing challenges” in its Middle Eastern markets.

The company added that it expects to complete a refinancing “shortly” and remains in discussions with “a number of key stakeholders and financing partners, to ensure that the group has adequate and appropriate financing for the future”.

In May, the company held talks with lenders to renegotiate or refinance its debt facility.

The company added: “Our medium-term guidance for the steady state operation, in more normal circumstances, of our continuing franchise operations remains that they are capable of exceeding 10 million pounds operating profit and that opportunities exist to grow our global footprint further.”