Mothercare improves deals with global partners, seals Boots link

By

Sandra Halliday

Published
Aug 20, 2020

Mothercare had some encouraging news on Thursday saying that its talks with its international franchise and manufacturing partners to “modernise and improve our commercial relationships to mutual benefit” have had a good outcome.

The firm has "successfully launched a more sustainable and less capital-intensive business model,” with effect from the AW20 season. 

“This new model results in our franchise partners contracting to pay for products directly to our manufacturing partners, thus removing the timing mismatch we were experiencing with the reduction in our payment terms and so improving the group’s working capital requirements,” the company 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”.

And also good news is the fact that as of this week, it completed the detailed contractual arrangements for the appointment of Boots UK as its UK and Republic of Ireland franchise partner. This will be for an initial period of 10 years.

Mothercare branded clothing will be available in a large number of Boots stores from this autumn with home and travel products (including pushchairs and car seats) available in larger Boots stores, as well as online at www.boots.com. 

“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 brand owner said.

Finally, it has also entered into a new 20-year franchise agreement with the Alshaya Group, its “most significant” franchise partner. “We highly value this long-standing and continuing strong commercial relationship, and we look forward to contributing to an extended period of mutually beneficial partnership growth in the future,” it said.