A new era for Mothercare? Baby retailer to resume selling on UK high-streets for the first time since collapsing as it gears up to flog clothes and pushchairs at Boots stores
- Mothercare fell into administration last year, with all its stores shut and jobs lost
- Boots has announced plans to cut 4,000 jobs as it ups its digital offerings
Stricken baby retailer Mothercare has confirmed it will start selling its products in Boots stores up and down the country from autumn this year.
Mothercare clothes will be on sale online and in a ‘large’ number of Boots’ shops, while bigger Boots stores will also stock items like Mothercare-branded pushchairs and car seats.
Mothercare, which now trades online and in overseas stores, collapsed into the hands of administrators last year, with all 79 UK shops shut and 2,500 jobs lost.
Moving on: All of Mothercare’s 79 UK stores were shut as it went into administration last year
The deal with Boots was first announced back in December last year, but was repeatedly delayed by the pandemic. It will run in the UK and Ireland for an initial period of 10 years.
Mothercare said today: ‘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.’
Mothercare’s deal with Boots come at a tough time for the pharmacy and healthcare retailer.
Boots is to cut 4,000 jobs, equating to 7 per cent of its workforce, as it closes 48 opticians outlets and sheds roles at its head office and stores.
The company, which has 2,465 stores, said it was accelerating a restructuring plan after sales at its main Boots outlets slumped over 70 per cent and sales at Boots Opticians fell by 48 per cent at the height of lockdown.
On announcing the job cuts, Sebastian James, the managing director of Boots UK, said: ‘The proposals announced are decisive actions to accelerate our transformation plan, allow Boots to continue its vital role as part of the UK health system, and ensure profitable long-term growth.
Job cuts: Boots has announced plans to cut 4,000 jobs across its operations
‘In doing this, we are building a stronger and more modern Boots for our customers, patients and colleagues.
‘We recognise that today’s proposals will be very difficult for the remarkable people who make up the heart of our business, and we will do everything in our power to provide the fullest support during this time.’
With swathes of the retail sector struggling to stay afloat, it remains to be seen how fruitful Mothercare’s deal with Boots proves to be in the long run.
But, in a bid to revive its fortunes, Mothercare also said it had now overhauled its business model and concluded extensive talks with its franchisees.
Bosses said the the new franchise arrangements would ensure a ‘more sustainable and less capital-intensive business model.’
It will see the group’s franchise partners pay for products directly to manufacturers.
Mothercare still operates 800 stores spanning 40 territories, which are all run by franchise partners.
The baby and child retailer said it had signed a new 20-year deal with its biggest franchise partner, the Alshaya Group, which operates Mothercare stores in Russia and 10 Middle Eastern countries.
It said that the restructuring of its UK business had substantially reduced its debts, but estimated that it still had outstanding obligations of around £10million.
The group was dealt a blow earlier this year when temporary boss Glyn Hughes said he did not want the job on a permanent basis.
Hughes quit in June, leaving Mothercare to be led by the chief operating officer and chief financial officer, under chairman Clive Whiley.
Shares in Mothercare have fared well today and are currently up 4.54 per cent or 0.26p to 6.02p, but a year ago the share price was closer to 15p.