Baby products retailer Mothercare witnessed a decline in revenue and swung to a net loss in FY23 amid lower sales – partly due to the suspension of operations in Russia.

The UK-headquartered company saw revenue decline 11.4 per cent to £73.1 million, with adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) falling 44 per cent to £6.7 million and a net loss of £0.5 million, in the 12 months to March 25.

Mothercare suspended its retail business in Russia in March last year and withdrew its right to operate branded stores in the country three months later. The company said the move resulted in several economic and logistical disruptions to the group.

Worldwide retail sales fell 16 per cent to £322.7 million, while online retail sales slid £29.3 million. Excluding Russia from the previous year’s performance, FY23 retail sales increased 9 per cent.

The company’s store count fell to 506.

Meanwhile, Mothercare marked a 15.5 per cent year-on-year drop in retail sales through its franchise partners to £132.5 million in the first 25 weeks of FY24, which it attributed to the challenges in its Middle Eastern markets.

The company said it expects to complete a refinancing shortly and remain in talks with stakeholders and financial partners to ensure sufficient funding for the future. Mothercare added that it is focused on restoring critical mass and monetising its global brand IP.

“We have a compelling market opportunity. 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,” said chairman Clive Whiley.

“There is still work to do, but we are excited about the future prospects for Mothercare as we leave behind the turmoil of recent years.”