In 2025, Babyshop’s turnover decreased by 8 percent to SEK 269.8 million, compared to the previous year. At the same time, operating profit improved from SEK -126.1 million to SEK -60.4 million.
The decline in revenue coinciding with a shrinking loss is a result of the company’s chosen course of action over the past year. According to management, the reduced sales were no surprise, but rather a planned step in the work to get the finances in order.
The main explanation for the decrease in turnover is that we continued to phase out sales within brands and markets with insufficient profitability in 2025. We have consciously prioritized a more profitable business over revenue itself,” says Darko Draskovic Ydremark.
This strategy now appears to be yielding results. According to the CEO, the trend has reversed during the current year.
So far in 2026, we have returned to growth, while results have improved.
The turnaround in the income statement is something the company expects will continue. The goal of achieving profitability is not far off, and a milestone was reached already in late summer.
As of the end of August 2026, the group had a positive EBITDA result over the rolling twelve months. Our current forecast is that the full year 2026 will also be positive at EBITDA level. This applies to operating profit before depreciation and amortization,” says Darko Draskovic Ydremark.
Debt and Capital
To stabilize the financial situation, the company brought in new funds at the end of last year. This involved a capital injection of SEK 64.9 million, but not all of it was pure cash.
Approximately SEK 50 million of the issue consisted of existing shareholder loans being converted into equity. This part strengthened the balance sheet, but did not involve any new liquidity injection.
The remaining funds have been used for day-to-day operations and to pay off the company’s loans.
Around SEK 15 million was added as new capital and has been used for a combination of amortizations and financing of ongoing operations,” says Darko Draskovic Ydremark.
However, the fact that the company has received new capital does not mean that all historical debts have been erased. When the books for 2025 were closed, a reconstruction debt of SEK 32.3 million still remained. Managing this item is part of the ongoing work, and according to management, the repayments are proceeding as expected. The target for when this remaining debt will be completely eliminated has already been set.
We are amortizing according to the reconstruction plan. According to that plan, the debt will be fully repaid at the end of 2027,” says the CEO.
The work to reduce costs has also left its mark on the organization. During the past year, the workforce decreased from 46 to 30 employees. But the adjustment did not stop there.
Explains Bankruptcy
In 2026, it became known that the subsidiary BS Customer Services Jönköping, which previously handled the e-commerce retailer’s customer service, was placed in bankruptcy. According to the CEO, the decision to let the company go down that path was a direct consequence of the economic reality.
The subsidiary was insolvent, and that was the reason it applied for bankruptcy. Babyshop’s customer service and other ongoing operations have not been affected,” says Darko Draskovic Ydremark, adding:
Customer service is now mainly handled through an external partner.
Despite the previous staff reductions and the handling of the subsidiary, no further major personnel reductions are planned. The focus is instead on the existing team.
We have no plans for major cuts. The focus going forward is on further developing the organization’s skills and working methods. Individual roles may be added or changed, but as part of the business’s ongoing development rather than a major reorganization.
Asia and Own Brands
In terms of sales, the e-commerce retailer has a spread across several countries. One market that stands out in the annual report is South Korea, which contributed over SEK 33 million to turnover in 2025. This makes the country one of the company’s most important regions.
South Korea has been one of our five largest markets for many years and continues to be important to us. Our ambition is to develop the business and grow profitably there. Just like in our other markets, we prioritize profitability over sales volume itself.
The company currently sells to more than 30 different markets. However, no aggressive geographic expansion is on the agenda in the near future.
The main priority is to strengthen our position and improve results in the markets where we already are. Individual new markets may become relevant when there is a clear business basis, but increasing the number of markets is not a goal in itself.
The strategy for the rest of 2026 and beyond is to consolidate the positive trend. This includes a focus on the company’s own product lines, which already account for a large part of sales.
The focus is on consolidating the improvement in results and continuing to develop sales with good profitability. That work continues in 2027 as well. We are developing the range and customer experience to strengthen Babyshop’s position as a destination for families with children.
At the same time, we continue to develop our own brands, including Kuling in functional clothing for children and Stoy in children’s bicycles. Kuling and Stoy are leading in their respective categories and currently account for more than half of turnover and are an important part of our continued development.
Despite the challenges in the rearview mirror and a demanding retail market, management is optimistic about what lies ahead for the company.
I am very positive about the development, especially since the improvements are now visible in both sales and results. We have a very competent and committed team and a clear direction ahead,” says Darko Draskovic Ydremark.
However, he emphasizes that it is important to be careful ahead of the upcoming high season.
We have one of the most important sales periods of the year ahead of us, so we take nothing for granted. E-commerce, and retail in general, requires both a clear whole and great attention to detail. We therefore continue to work on the many improvements in range, customer experience and cost control that together build a stronger company,” concludes Darko Draskovic Ydremark.