Mothercare launches ‘sustainable’ business model

Maternity and nursery retailer, Mothercare has unveiled its new ‘more sustainable’ business model, which is due to launch later this year.

An official anouncement outlined the new model, which has been created as part of a plan to ‘modernise and improve’ its commercial relationships, as a result of ‘constructive discussions’ with international franchise and manufacturing partners.

The new ‘more sustainable and less capital-intensive’ business model will officially come into effect this autumn/winter and aims to improve pricing and quality for franchise partners, while reducing financial and operational risk for manufacturing partners.

The new set-up will see franchise partners paying suppliers directly for products and in doing so removing any ‘timing mismatch’ and improving Mothercare’s working capital requirements.

Expected benefits of the new arrangement include improved pricing for franchise partners, which in turn should ‘better incentivise retail sales growth and assist manufacturing partners in reinstating credit insurance for future seasons’.

The update also revealed the contracts had been finalised for the ten-year appointment of Boots UK as Mothercare’s UK and Republic of Ireland franchise partner.

The partnership will see Mothercare-branded clothing available in a large number of Boots stores across the UK and Ireland from this autumn, as well as online.

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