Mothercare announces less capital-intensive business model

22 Aug '20

2 min read

Pic: Mothercare

Mothercare recently announced launching a more sustainable and less capital-intensive business model from the Autumn/Winter 2020 season. Its franchise partners will now be contracted to pay for products directly to its manufacturing partners, removing the timing mismatch felt with the reduction in its payment terms and improving its working capital requirements.

“We believe this new way of working will ultimately have the added benefits of improving pricing for franchise partners, which in turn should better incentivise retail sales growth and assist our manufacturing partners in reinstating credit insurance for future seasons,” the UK-based apparel company said in a press release.

On 19 August, it completed the detailed contractual arrangements for the appointment of Boots UK Limited as its UK and Republic of Ireland franchise partner. This will be for an initial period of ten years and the terms and royalty rates arrangements are commensurate with those of the company’s other franchise agreements.

Mothercare branded clothing will be available in a large number of Boots stores across the UK and Ireland from this autumn with home and travel products (including pushchairs and car seats) available in larger Boots stores, as well as online at www.boots.com.

It also entered into a new 20-year franchise agreement with Kuwait-based Alshaya Group.

Fibre2Fashion News Desk (DS)

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