Mothercare sticks with troubled warehouse
Contract terms with Tibbett & Britten amended
March 26 2003
UK retailer Mothercare is to keep its Daventry warehouse open, under a revised contract with operator Tibbett & Britten.
Problems with the warehouse, which opened in 2001, played a key part in stock problems which have hit sales and profits at the UK mother-and-baby goods retailer. A review of operation at the warehouse was one of the first tasks undertaken by new Mothercare chief executive Ben Gordon when he took up the role in December.
The company said it looked at options including changing both site and contractor, but decided that the warehouse is now working effectively and costs are beginning to reduce. Remaining at the current site is ‘low risk’ compared to the disruption and cost of another warehouse move.
Tibbett & Britten will now operate the warehouse on a two-year rolling contract, with a management fee that includes a performance measure.
Ben Gordon is continuing with a full review of the business, including the supply chain. He said: “We have worked with rigour and speed to reach this conclusion. We have considered every option and looked for the most appropriate solution to support the business at this time. We believe that the decision to remain at Daventry with Tibbett & Britten gives Mothercare stability now and the flexibility to review our requirements in two years time and to accommodate the conclusions of the supply chain work we are undertaking.
“Working closely with Tibbett & Britten, we are making good progress in improving the cost structure and performance of the warehouse and continue to meet customer needs effectively.”
Tibbett & Britten chief executive Mike Arrowsmith said: “These arrangements with Mothercare reflect the spirit of partnership that has developed with the new management team. Furthermore, these arrangements provide the necessary flexibility to build and reward continued performance mprovements. We are confident that the relationship now in place will facilitate the achievement of these goals.”
