Boots to sell Mothercare products as delayed deal sealed
Written by Hit Music Radio News on 20/08/2020
Mothercare has finalised a delayed deal with Boots to sell its goods across the chain from the autumn.
The baby products firm, which put its UK business into administration last year leading to the closure of all 79 shops and the loss of 2,500 jobs, said it had completed an agreement with with the health and beauty retailer to become its UK and Ireland franchise partner.
It will see Boots selling Mothercare-branded clothing and home and travel goods, including pushchairs and car seats, in-store and online.
First announced in December, the deal had faced a series of hold-ups due to the coronavirus pandemic.
Announcing the finalised 10-year contract, Mothercare said: “Boots is at the heart of one of the largest healthcare businesses in the world and Mothercare will dovetail well as the specialist brand for parents and young children in both Boots stores and online.”
The company said it had also struck a new 20-year deal with Alshaya Group, its main franchise partner, which has stores throughout the Middle East and in Russia.
In a further change, the firm said an overhaul of its franchise arrangements would ensure a “more sustainable and less capital-intensive business model”, with the group’s partners paying manufacturers directly for products.
Mothercare said: “We believe this new way of working will ultimately have the added benefits of improving pricing for franchise partners, which in turn should better incentivise retail sales growth and assist our manufacturing partners in reinstating credit insurance for future seasons.”
However, the company added that despite “a substantial reduction in the amounts owed” it still expects to take a £10m hit as a result of the UK administration.
The process left the group to focus on simply providing branded products to retailers.
Mothercare’s interim boss Glyn Hughes quit in June, leaving the firm to be led by the chief operating officer and chief financial officer, under chairman Clive Whiley.
© Sky News 2020