Mothercare shares crash 17% as auditors warn of threat to survival

Mothercare has warned that a deterioration in trading could threaten its ability to remain a going concern, sending shares in the struggling baby-products group plunging as investors digested a sharp fall in revenue and mounting debt.

Shares in the London-listed company fell 17 per cent to 0.75p on Friday after its latest accounts revealed a 42 per cent collapse in annual revenue to £22.4 million.

The deterioration was driven by weaker sales from international franchise partners, which Mothercare attributed in part to instability in the Middle East, alongside the loss of its exclusive distribution agreement with Boots at the end of 2025.

The group swung from a £11.9 million pre-tax profit a year earlier to a £4.3 million loss for the year to March 28. Net debt also increased to £6.4 million from £4.5 million.

Mothercare said it currently believes it has sufficient cash to fund its operations for the next 12 months. But its accounts warned that a further deterioration in trading, combined with failure to deliver planned improvements in costs and cash management, could leave it unable to meet its liabilities.

That could force the company to seek additional funding.

Its auditors consequently identified a “material uncertainty” that casts significant doubt over whether the group can continue operating as a going concern without raising fresh funds.

The warning marks another precarious chapter for a brand that once occupied a prominent position on Britain’s high streets. Mothercare closed its remaining 79 UK stores in 2020, ending a 59-year retail presence, and subsequently rebuilt itself around international franchises and supplying products to other retailers.

The business is now increasingly dependent on partners beyond the UK at precisely the moment geopolitical disruption and weaker consumer demand are undermining those markets.

The loss of the Boots relationship has added another structural blow to a business already operating on a much smaller scale.

For investors, the central question is no longer simply whether Mothercare can restore growth, but whether it can do so before its cash position forces it back to the market for more money.