In its recent update, Mothercare, a renowned retailer in the baby and toddler industry, discussed its progress in implementing its transformation plan. The company has successfully shifted its focus to brand management and the design and sourcing of products for its global franchise partners. However, the outbreak of Covid-19 has presented significant challenges for Mothercare, impacting both its franchise partners and suppliers.
While many head office staff in the UK have been able to work remotely and maintain productivity, certain retail personnel are unable to do so. To support these employees, the UK government’s support scheme is being utilized for approximately 430 workers in the Boots Mini-Club retail division, as Boots has become the exclusive UK franchisee for Mothercare. Despite these measures, Mothercare has acknowledged that the pandemic has caused some delays in the final signing of contracts. However, it is anticipated that these delays will be resolved by spring, and the full product range will be available by summer.
Additionally, Mothercare has addressed the global impact of Covid-19 on its franchise partners, recognizing that it may have a material effect on the company’s short-term revenues. The company has drawn on its experience from the controlled supply shock following the administration of Mothercare UK and store closures in November 2019, which has proved valuable in navigating this crisis. Mothercare is actively engaged in discussions with its franchise partners and manufacturing partners to mitigate the impact on both parties’ businesses.
Debt reduction has also been a priority for Mothercare, and the company has been in talks with various debt providers to secure new debt facilities. Chairman Clive Whiley emphasized that contingency plans have been activated to address the challenges faced by Mothercare and others during this global crisis. The well-being of colleagues remains a primary concern, in addition to the ongoing business operations and corporate liquidity. Mothercare expressed gratitude for the support it has received from key stakeholders and financing partners during this unprecedented time.
Whiley stressed the need for a collaborative approach to preserve the businesses of Mothercare’s franchise and manufacturing partners. This strategy is aimed at ensuring short-term liquidity and paving the way for long-term profitability. Mothercare has already witnessed the benefits of this approach and is committed to navigating these challenging times successfully.