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(Sharecast News) - Mothercare shares tanked on Friday as the retailer warned of an "uncertain" future after its leading Middle East franchise partner said it would be closing most of its stores.
The company said its franchise partner was revising its Mothercare stores and while the review has yet to conclude, it has indicated that it expects to close "the substantial majority" of the franchised stores in the territory next year.
As a result, there will be a "material" reduction in Mothercare's order book for FY28 and a commensurate reduction in revenues, profits and cash flows.
Mothercare said it has sufficient resources to trade for a number of months and has immediately begun a strategic review of its business model and cost base with a view to preserving value for stakeholders. The outcome of the review and the longer-term solvency of the company remains highly uncertain, it said.
Chairman Clive Whiley said: "Whilst our recent financial performance has been resilient, this is a heavy blow to the Mothercare business and our stakeholders.
"We will continue to pursue discussions to restore critical mass and value for stakeholders, against this more difficult backdrop."
At 0930 BST, the shares were down 68% at 0.25p.
See latest RNS on Investegate
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