Coronavirus delays Mothercare franchise deal with Boots

Mothercare update covid-19 boots Clive Whiley
Its deal with Boots, which was agreed in December, has seen some delays due to the pandemic
// Mothercare updates its transformation plan
// The coronavirus pandemic has delayed its franchise agreement with Boots
// The impact of coronavirus will “have a material impact on short-term revenues”

Mothercare has said its UK franchise deal with Boots has been delayed due to the coronavirus pandemic, following an update in its transformation plan.

The turnaround plans were first announced on November 5, but have since been updated to set out initiatives to become “a profitable international franchise operation, generating revenues through an asset-light model, operating in over 40 international territories”.

Mothercare’s UK arm went into administration last November, resulting in 2500 job losses and 79 store closures, and the maternity retailer said it was now “drawing on that experience”.


Its deal with Boots, which was agreed in December, has seen some delays due to the pandemic but it is due to be finalised in late spring, with a wider Mothercare product offer available online and in Boots stores from late summer 2020.

The impact of Covid-19 is expected to have “a material impact on its short-term revenues”.

Mothercare said it was in discussions with a number of debt providers regarding entering into new debt facilities.

It is in talks with US advisory and investment firm Gordon Brothers to progress a £20 million secured term loan.

It has also announced a “substantial reduction in bank debt” since November 2019.

This includes an initial distribution of £10 million from its administrators.

Its total secured debt, which at the time of the administration included the group’s £24 million revolving credit facility, has been reduced to £18.5 million.

”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,” Mothercare chairman Clive Whiley said.

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

”We believe that the intrinsic value of our brand, the close contact fostered with our key stakeholders over the last two years and our seamless, deep understanding of the group’s new trading cash flow dynamics, honed over the last six months, will prove to be extremely valuable.

“At this time we believe that our efforts should be focused on helping to preserve the businesses of our franchise and manufacturing partners through even more collaborative ways of working, to ensure both the short term liquidity of our business together with our return to longer-term profitability.

“We are already seeing the benefits of this approach being brought to bear.”

Mothercare said that while many of its key UK head office staff are working productively from home, a number of its retail personnel are unable to do so.

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