Coronavirus delays Mothercare franchise deal with Boots

Nursery and maternity retail group Mothercarer has announced that Covid-19 ramifications have delayed its planned franchise partnership with Boots, pushing the roll-out back to late summer.

The news came following an update to Mothercare’s  transformation plan, which was announced towards the end of 2019, after the UK arm went into administration, resulting in 2,500 job losses and 79 store closures

The turnaround plans have been updated a number of times since then, setting out the Group’s aim to become ‘a profitable international franchise operation, generating revenues through an asset-light model, operating in over 40 international territories’.

The franchise deal with Boots, which was agreed in December 2019, has been affected by the Covid-19 pandemic and is now due to be finalised in late spring, with a more comprehensive Mothercare offering available online and instore from late summer.

The update also announced that the considerable challenges being faced by Mothercare’s global franchise partners are likely to lead to a material impact on short-term revenues. “We will not be immune to the effect of widespread store closures and restrictions on local population freedom of movement in those territories,” the statement read.

Mothercare also announced a ‘substantial reduction in bank debt’ since November 2019, from £24 million to £18.5 million, including an initial distribution of £10 million from its administrators.

”In the current circumstances, we have activated our contingency plans to deal with the challenges that we and others are facing in the current global crisis, focusing on the well-being of our colleagues alongside our ongoing business and corporate liquidity,” said chairman Clive Whiley.

“We continue to enjoy the support of our key stakeholders and financing partners and we are very grateful to them at this unprecedented time.”

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