Mothercare warns of solvency risk after franchise-store closure plans

Mothercare ($MTC-LSE) warned that its longer-term solvency is highly uncertain after its main Middle Eastern franchise partner indicated that most of its stores in the region are expected to close in 2027. The company anticipates a material reduction in its financial-year 2027–28 order book, with corresponding pressure on revenue, profit and cash flow.

Management said existing resources are sufficient to continue trading for a number of months and launched an immediate review of the business model and cost base. The franchise partner’s review has not yet concluded, so the eventual store count remains uncertain. This is a new liquidity and operating warning, not confirmation that Mothercare has entered insolvency or that all franchise locations have already closed.

Sources:

• Mothercare — financial outlook announcement, company release reprint
• PA / The Independent — liquidity warning and franchise review