27th Jan 2014 10:23
LONDON (Alliance News) - Struggling mother and baby products retailer Mothercare PLC is in talks to sell of its troubled children's toys business Early Learning Centre, The Sunday Times reported.
The baby products chain is said to be in discussions with several potential buyers of ELC, which was hit particularly hard by heavy discounting in the run-up to Christmas, and is understood to have appointed investment bank Lazard to advise on the potential sell-off, according to The Sunday Times.
Mothercare has been struggling in the UK for several years, hit by increased competition, particularly from online retailers, and in an attempt to recover, has been shedding some of its store portfolio.
The retailer saw more than a quarter of its market value wiped out at the start of this month after its latest profit warning, which revealed that total UK sales were down 9.9% in the 12 weeks to January 4, while like-for-like sakes were down 4%. Its international sales were also hit by currency depreciation.
Mothercare paid GBP85 million for the Early Learning Centre seven years ago.
In its statement on January 8, Mothercare said a weak UK toy market had hit ELC sales, and said it had reduced the number of ELC outlets to 40 from 50 between its first and third quarters.
Mothercare declined Monday to comment on the Sunday Times story.
Shares were down 2.6% at 262.62 pence per share Monday morning.
http://www.thesundaytimes.co.uk/sto/business/Retail_and_leisure/article1367379.ece?CMP=OTH-gnws-standard-2014_01_26
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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