UK babycare retailer Mothercare announced that it is in talks with Chelsea Stores, parent company of rival educational toy seller Early Learning Centre, to buy the children's retail chain for £85m in cash and shares.

The move, should it be agreed, will bring together two of Britain’ biggest names in children’s’ stores. While Mothercare has several large out of town stores, the Early Learning Centre’s high street only locations could allow the expansion of its ranges and a boost to sales.

Mothercare has suffered in the “volatile UK consumer environment”, but has offset losses with strong growth from its international operations. It is said to be on track to open 70 overseas stores in this financial year, with more than 300 already operating under franchise agreements. The Early Learning Centre currently has a modest 80 international outlets.

Mothercare said a further announcement will be made “in due course.”