The Mothercare franchise story is more complicated than the headlines suggest
Updated: Sep 30
The Mothercare franchise model has now lost both of its largest territories inside five years. Russia went first. Mothercare suspended its Russian business in March 2022 and withdrew its partner's right to trade under the name just over three months later, and with it went roughly one hundred and twenty stores and somewhere between a fifth and a quarter of retail sales. Now the Middle East is going the same way. On the 17th of September the group's leading Middle Eastern franchise partner notified it that it is reviewing its stores in light of the ongoing situation in a number of its territories, and expects to close the substantial majority of them in 2027. Mothercare has not named that partner. It is the Kuwait based Alshaya Group, which Mothercare itself named in 2020 when the two signed a twenty year franchise agreement, and which Mothercare's broker Cavendish identified after this month's statement. Cavendish puts the territory at 62 of Mothercare's 331 global stores, around a fifth of the network, in a region that accounted for around 28 per cent of group revenue last year.
The easy story to tell about that is that both were simply geopolitical situations and Mothercare was just collateral damage. I do not believe that, and I would not insult anyone's intelligence by writing it.
The honest answer is that this is complicated, and the complication is the story. The regional situation is real, of course, and so is the concentration risk. But there were also real difficulties in how the business operated, and a partner reviewing its estate is weighing all of it: the trading environment, yes, and also the product on the shelf, the terms, the lead times and how straightforward the whole arrangement is to run.
I was Global Product Director for Mothercare in my last corporate role, so watching it unravel has been hard. The Middle East was our biggest franchise market then and Russia was close behind it, and it often felt as though the tail was wagging the dog. The biggest markets had strong voices and strong opinions about where the brand should be heading, which is entirely understandable when you are the one carrying the sales, and that direction was not always the right direction for the UK market.
Some of what made it hard is genuinely worth other founders knowing about, because it is structural rather than personal. This is what I saw from the inside, and it was some years ago now, so the model may well have changed since.
The first is lead times. Launching a range simultaneously across many markets sounds like strength and is in practice a scheduling problem of a size most people never have to think about. Everything has to be ready everywhere at once, which lengthens the critical path enormously and leaves very little room to react to anything.
The second is that it ran as a pull model rather than a push model. Partners ordered what they wanted, rather than being shipped an agreed, planned range. Most large franchise operations do the opposite, and for good reason: a push model gives the brand owner control of the range, the buy and the margin, and it makes forecasting possible. A pull model hands a great deal of that to the partner, and once several large partners are pulling in different directions the centre is no longer really deciding anything.
And underneath both of those sits a piece of history I have a great deal of sympathy for, and which almost nobody writing about this week has mentioned. Mothercare was one of the earliest established British high street retailers to use franchising as a route into international markets. Alshaya dates its first Mothercare store in Kuwait to 1983, and it was Alshaya's first retail franchise. Mothercare's own history puts the start of its international franchising a year later, in 1984.
That partnership became the foundation of what Alshaya is today, one of the world's leading international brand franchise operators, with a portfolio that has included Starbucks, H&M, Boots and Victoria's Secret across the region. So it is worth sitting with this for a moment. The partner now closing the substantial majority of its Mothercare stores is the same partner whose entire franchise business began with Mothercare, forty three years ago.
And Mothercare was doing this before there was a playbook. The Body Shop had franchised abroad a few years earlier, so this was not the very first British retail brand overseas, but very few established British chains had exported an entire retail proposition this way: brand, range, store concept and expertise out, local capital, property and market knowledge in. There was nobody else's mistakes to learn from, so the business invented its own answers, and some of those answers turned out to be wrong. The real problem is not that early decisions were imperfect. It is that by the time anyone could see they were wrong, they were so deeply embedded in how the whole thing worked that unpicking them was close to impossible.
There were internal difficulties as well, and those are not mine to set out.
Here is why all of that is structurally fatal now in a way it would not have been then. Mothercare today is not the retailer people remember. It closed around 55 UK stores after a company voluntary arrangement in 2018, then its UK retail subsidiaries went into administration in November 2019, with the last UK stores and the website closing in early January 2020. Since then it has operated purely as a global brand and franchise business, with no shops of its own anywhere. Revenue for the year to the 28th of March 2026 fell 42 per cent, to £22.4 million with the end of its UK arrangement with Boots and the Middle East disruption both behind the fall. A business with a home market absorbs the loss of a territory. A business that is only a franchise model has nothing to absorb it with. That is why one partner's review can raise a question about the whole group.
And yet. What is actually still there is more than the obituaries suggest. Mothercare still has a joint venture with Reliance Brands across South Asia, a licence agreement with ebebek in Turkey signed last year, and partners across Southeast Asia. And it still has a name that new and expectant parents in multiple markets recognise and trust before they have walked through a door, which is the single hardest thing in this industry to build and the one thing you cannot buy quickly at any price.
But I am not going to pretend that estate is untouched, because it is not, and anyone who knows the business will know it. Early Learning Centre, which Mothercare bought for £85 million, was sold to The Entertainer in March 2019 for £13.5 million. The only reason the group reported a profit the year before last was that it sold 51 per cent of the entity holding its South Asian intellectual property to Reliance Brands, its own partner there, for £16 million gross, keeping 49 per cent. Strip that sale out and the year underneath it was a loss. That is what running out of structural options looks like from the inside. When the way you stay solvent is selling a share of the very thing your partners are paying to use, you are not fixing the problem, you are spending the asset. It bought time. It did not buy a structure.
So what would it actually take to turn the business around. It is a great deal deeper than the range and the marketing, which is where most people's minds go and where the money usually gets wasted. If it were me, these are the three areas I would focus on.
One. Simplify the range, and hold it centrally
The single biggest problem was that there were too many versions of the same thing. Large partners pulled the range in different directions, based on what they believed their own customers wanted. Some of those reasons were entirely legitimate: real differences in climate, and genuine cultural observance. There are things you simply cannot put in front of a customer in certain markets, and you would not want to. But a good deal of what came back to us was anecdotal rather than evidenced, and the two got treated the same way. Other global retailers manage exactly these variables without fragmenting a range, and we always felt there were ways to work around it.
What the pull model did instead was let the options multiply. Not different products, but variations of the same product, over and over. That is expensive in ways that are easy to miss from the outside. It is enormously complex for a factory to manage. It pushes cost prices up, and those get passed to the franchise partner and then to the customer. And it lengthens everything: the time to work through the different orders, the time to get them through the production lines, and in the end the lead time itself. When I was there the lead time ran to eighteen months. I do not know anyone else in this industry working to that, and a business cannot really trade on those timescales.
The same fragmentation is what happened to the product handwriting. If every market carries its own variations, and the largest partners are adding their own options on top, the name above the door gradually stops standing for anything identifiable on the shelf. The handwriting does not get abandoned in one decision. It dissolves, one reasonable request at a time.
And there was a third version of it, running the other way. Because some categories performed far better internationally than they did here, the UK had to carry them anyway, because that was how the franchise agreement had originally been written. The product did not sell in the UK and it cost us a great deal in markdown.
So: one range, held centrally, adapted where climate or genuine cultural observance demands it, and not otherwise. Fewer options, a simpler ordering process, shorter lead times. That is not a design preference. It is what determines whether the business can trade at all.
Two. Lead the category rather than supply it
A brand that intends to be the market leader has to be the one bringing things to market first. That is what I went to Mothercare to do, and I still think it is the most valuable position available to it. Not a retailer of baby products, but the pioneer of innovation in the category, the pioneer of best practice, and the pioneer of the safest products a parent can buy.
Because the trust is the asset. People bought from Mothercare for decades because they trusted it, and that trust is the reason people still believe there is equity in the name. But trust is not a balance you can draw down indefinitely. It has to be reinforced, and the way you reinforce it is by testing and learning continuously: what is genuinely best for a child as fabric technology moves on, as manufacturing processes change, and as we understand more about what products are actually made of and what that means for a small body.
That means using everything we now know to make product as safe as it can possibly be. And it means protecting the planet those children are going to inherit, which is not a marketing position. It is part of the same responsibility.
Three. Be clear about the purpose and the values
Eric Musgrave, who has written about this industry since 1980, sent me a photograph this week of a page from an old copy of Drapers Record. It is an advertisement for a firm of storefitters called Liddle Keen & Co, and the picture in it is the Mothercare shop in Lewisham, some time in the early 1960s. Above the door there is a small sign, and it reads: everything for the mother-to-be and her baby.
That is the entire proposition, in six words, written on a shopfront more than sixty years ago. I am not being sentimental about it. I am pointing out that it is clearer than almost anything the brand has said about itself since, and that a business does not usually need to invent a new purpose when it has one that good sitting in its own history.
When I joined, I believed Mothercare already was the leading children's birth specialist in the UK and that it should go further, becoming the pioneer of innovation and best practice for the whole category rather than just a retailer of baby products. I still think that is available. I remember Selim Zilkha, who founded it, being absolutely clear that the job was to keep it simple and reduce choice to make it easy to shop. That instinct, stripped of nostalgia, is almost exactly what conscious retail is reaching for now: fewer, better, clearer, chosen for you by people who actually know. A brand with Mothercare's recognition could do that properly, at global scale, and be credible from day one in a way a start up simply cannot be.
I do not know what happens from here, and I am not going to speculate about a process that is unresolved. What I will say is that it is a travesty that a brand with this much left in it has reached the point where a single partner's territory review can put the whole thing in question. Not because any one person was careless, but because the structure was built early, built without a map, and never properly rebuilt afterwards.
What this means for you: look at your own international arrangements and ask two questions. What proportion of revenue does your largest partner represent, and who is actually deciding what the range is. If the honest answer to the second one is not you, that is worth more of your attention this year than anything on your marketing plan.
FREQUENTLY ASKED QUESTIONS
What has actually happened to Mothercare?
On the 17th of September 2026 its leading Middle Eastern franchise partner notified the company that it is reviewing its stores and expects to close the substantial majority of them in 2027. Mothercare did not name the partner, but it is the Kuwait based Alshaya Group, named by Mothercare itself in 2020 and identified by its broker Cavendish this month. Mothercare has said this will materially reduce its FY28 order book and that its longer term solvency remains highly uncertain.
Is Mothercare going into administration?
Not confirmed. As things stand this is a solvency warning and an ongoing strategic review, not a confirmed administration or an announced sale process.
Why does one franchise partner matter so much?
Because Mothercare has no retail business of its own. It closed its last UK stores in early 2020 and now operates purely as a global brand and franchise business, so there is very little operating business left to absorb the loss of a territory. The Middle East was around a fifth of the store network but roughly 28 per cent of group revenue.
What is the lesson for other brands?
That concentration is only part of it. Simplify the range and hold it centrally, because fragmentation drives up cost and lead times long before it damages anything else. Lead your category rather than supplying it. And be clear about what the brand is actually for. Fix structural decisions early, because the longer they run the harder they are to unpick.
If you are building a brand that franchises or licenses internationally, and you want to structure it so that no single territory partner can ever hold the whole business over a barrel, that is exactly the kind of conversation we have at The Nest. Come and talk to us.
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