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Babycare retailer Mothercare UK has finalised a deal with Boots to sell goods across the chain in time for the autumn season.

Mothercare announced a new business model following talks with its franchisee.

 
Under the terms of the deal with Boots the pharmacy chain will become Mothercare’s Ireland and UK franchise partner.

The agreement, which was first announced in December, allows for Mothercare clothing to be sold in all Boots shops across the two countries, while bigger items such as pushchairs and car seats will be sold in the larger Boots stores. The products will also be available to buy online.

The Boots deal had suffered a series of delays due to the coronavirus pandemic.

Mothercare – which last year put its UK stores into administration, closing all 79 of its shops – has also announced a new business model after talks with franchisees.

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It said the new franchise arrangements would ensure a “more sustainable and less capital-intensive business model”.

That model will see the group’s franchise partners pay for products directly to the manufacturers.

Shares in Mothercare jumped in morning trading yesterday, rising as much as 18pc at one stage yesterday before settling around 7pc higher in London.

As well as the 10-year Boots deal, Mothercare said it had also struck a new 20-year franchise arrangement with Alshaya Group, its main franchise partner.

But Mothercare added that it still expects to take a £10m (€11m) hit from the UK stores entering administration last November.

The administration left Mothercare refocused on simply providing branded products to retailers.

In June, the group was also dealt a blow when temporary boss Glyn Hughes said he did not want the job on a permanent basis.

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His departure saw Mothercare led by the chief operating officer and chief financial officer, under the eye of chairman Clive Whiley.

Mothercare Ireland was placed into liquidation in June with the loss of 197 jobs after the directors said they could no longer see a viable future for the business.

Prior to that the company – which is a separate entity to Mothercare UK – had operated 14 stores across Cork, Drogheda, Dublin, Dundalk, Galway, Limerick, Newbridge, Portlaoise, Sligo and Tralee.

The business had been operating in Ireland since 1992.

In 2018 sales in Ireland were €28.5m, generating a profit of €136,000.

By Ellie Donnelly

Source: Independent

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