Morrisons has sold its baby products business Kiddicare.
The retail group bought the business from the founders in 2011 for £70 million, in an attempt to diversify into prams, buggies, cots and childrenswear. Kiddicare embraced ecommerce early on and had a strong online presence which was also attractive to Morrisons. Now, only three years later, it has sold it at a massive loss. Endless, a private equity firm specialising in turning around struggling companies, has bought the business for £2 million.
In March, together with a profit warning, Morrisons announced that it would be disposing of Kiddicare as it no longer had a strategic role within the group. Morrisons accepted a £163 million writedown on Kiddicare and said that it was confident that the figure would be enough to cover all costs associated with exiting the business.
Kiddicare had sales of around £80 million for the year ended February 2014 and Garry Wilson, managing partner of Endless, said, "Kiddicare has a history as a trusted brand in the children's market. We will be working hard with management to grow the business over the long-term."
Kiddicare employs around 1,000 people at present but a major restructuring is expected to take place, with Endless potentially moving the business to an online only presence.
© 2014 European Supermarket Magazine by Nicole Gernon
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