High street giants join forces for new clothing range

High street retailers Mothercare and Boots today announced a deal to collaborate on an exclusive range of clothing and accessories to be sold through Boots stores.

The two firms will design, source and supply the collection ready for launch in Boots outlets across Ireland and the UK this autumn.

It extends an existing relationship that Mothercare has to sell Early Learning Centre (ELC) toys through more than 400 Boots outlets.

Ben Gordon, chief executive of Mothercare, said they had already started work on what they hope will be "a distinctive and quality product range".

Alex Gourlay, chief executive of the health and beauty division at Alliance Boots, added: "This move will further strengthen our baby and child range and build on our reputation for offering great value children's wear."

The collection is expected to take over from the existing Mini mode children's range at Boots run by Adams, the troubled retailer that last month went into administration for the second time in little more than a year.

Retail analyst Matthew McEachran at Singer Capital Markets said it was another "exciting development" from Mothercare and came as a welcome revamp of Boots' existing children's offering.

He said: "Despite having been launched several years ago when Boots was a public company, Mini mode does not appear to us to have been run well, with stock gaps and heavy mark-down apparent year to year.

"Given Boots heavy footfall dynamics, a better ranged and better run kids offer ought to be significantly more productive than was the case before."

He estimates the deal - expected to be run as a wholesale arrangement with a profit share agreement on top - could generate at least £3m (€3.4m) to £4m (€4.5m) in annual underlying earnings for Mothercare by 2012.

Boots said the new range is likely to run in a similar number of stores as seen under the ELC arrangement, although there is scope for extension with Alliance Boots owning more than 2,600 stores and pharmacies in the UK and another 400 to 500 overseas.

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