Mothercare rescues UK presence with Boots supply deal

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© Reuters. Paper carrier bags are seen in a Boots store in London© Reuters. Paper carrier bags are seen in a Boots store in London

(Reuters) – Mothercare Plc (L:) said on Friday it had agreed to supply baby care and other products exclusively to Boots UK stores, keeping its goods on British shelves after the collapse of its retail network in its home market.

Shares in the company, which called in administrators for its UK business last month and is set to close all of its British stores with the loss of at least 2,500 jobs, jumped 10.4% to 14.9 pence in response to the news.

Boots, owned by U.S.-based Walgreens Boots Alliance (O:), will sell Mothercare-branded clothing, home and travel products, pushchairs and car seats, in larger Boots stores across the UK as well as online.

Mothercare said the deal was “great news” after a grim year for the company.

The baby products retailer that operates 1,010 overseas franchise stores has fallen victim to extremely difficult conditions in Britain because of stiff competition from online retailers and rising costs.

The company has said it will now focus abroad as it sets out to return the rest of the group to profitability.

But it warned earlier this week that volatility in markets including India, Indonesia and Russia, and supply disruptions from the UK closures could see trading performance worsen further.

A limited range of Mothercare products will be available to buy online at Boots from mid-2020, and a wider range will be available from late summer 2020.

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