A ‘reverse premium’ payment of £40 million has been paid to supermarket group Morrisons in the deal which has seen it take over the leases of 10 former Best Buy stores, it has been revealed today.
It was announced yesterday that Morrisons would be taking the out of town outlets for its recently purchased mother & baby products brand Kiddicare to expand into, relieving Carphone Warehouse (CPW), which had been in partnership with US based Best Buy in the UK, of the leasing agreements.
Now, according to The Telegraph, it appears that CPW is paying for the disposal to protect itself from further losses which would have been generated by the properties lying empty.
This reverse premium agreement may become more popular with struggling UK retailers as several major non-food traders, such as Mothercare, Thorntons and HMV, look to reduce their store portfolios.
Morrisons is clearly trying to capitalise on Mothercare’s retreat from UK stores by setting up its rival brand in these locations, and Kiddicare’s CEO Scott Weavers-Wright told The Telegraph that he wanted to establish another 10 stores with a focus on the north of England and Scotland.
He reportedly added: “Mothercare has lost its way in the UK when it comes to service. They have failed dismally. The stores are downbeat and tired.”
Kiddicare built up a strong online following by specialising in quality customer service and innovative an innovative social media presence which encouraged customers to comment on products and its services.
Weavers-Wright is ideally looking for locations adjacent to existing Morrisons stores for any new Kiddicare outlets, allowing customers to use the same car park to shop at both.