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Mothercare puts employees on furlough as Boots franchise deal delayed

The baby care business agreed a deal to sell its branded products in Boots after shutting its own UK stores.

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Mothercare has put UK staff on furlough and delayed its franchise deal with Boots (Andrew Matthews/PA)

Mothercare has put UK staff on furlough and delayed its franchise deal with Boots (Andrew Matthews/PA)

Mothercare has put UK staff on furlough and delayed its franchise deal with Boots (Andrew Matthews/PA)

Mothercare has sent home 430 employees in the UK as the troubled company said the coronavirus outbreak is likely to impact its short-term revenue.

Key UK head office staff are still working from home, the company said, but its staff who look after the Boots Mini-Club brand have been furloughed with government support, the company said.

Mothercare said its experience of going into administration in the UK last year “is proving invaluable” as it deals with the impact that coronavirus will have on its franchisees around the world.

It added that a deal to bring Mothercare products into Boots stores in the UK has been delayed and is now scheduled to come to fruition late this summer.

Boots shop sign
Mothercare’s deal with Boots has been delayed (Nick Ansell/PA)

In December, Mothercare agreed a deal for Boots to become its exclusive franchisee in the UK and sell Mothercare-branded products across its stores.

The retailer shut all of its 79 UK retail stores in January, with 2,500 jobs lost across the country.

The baby care business said this was part of a “transformation plan”, which has seen it become an international franchise operation.

Mothercare chairman Clive Whiley said: “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 wellbeing of our colleagues alongside our ongoing business and corporate liquidity.

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

He added: “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.”

PA