Mon, 27 Jan 2014 | BUSINESS SALE
A sale could be on the cards for struggling Early Learning Centre (ELC) after owner Mothercare reported a profit warning this month.
Reports have emerged that Mothercare has begun discussions with numerous possible buyers after ELC reported weak pre-Christmas trading figures.
Investment bank Lazard is understood to have been hired as an adviser for ELC and its 40 stores.
The toy market has been rocked in recent years by the shifting trend towards electronic gadgets for babies and children, and away from more traditional toys.
Mothercare acquired ELC in April 2007 for £85 million in a deal with parent company Chelsea Stores that secured ELC shareholders a 16 per cent stake in Mothercare. The arrangement was seen as harmonious by Mothercare at the time.
The 2007 takeover brought troubles to Mothercare however, Keith Bowman, an equity analyst at Hargreaves Lansdown, said recently, in a challenging toy market.
Mothercare’s direct division – Direct at Home – suffered a drop in its quarterly sales to 4 January, due to a lull in sales through ELC’s website. The retailer had decided not to run last year’s free delivery offer again, which impacted sales Mothercare boss Simon Calver said.
Established in the mid-1970s, ELC sells toys that encourage imaginative play and learning for ages 0 to six plus.
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Mothercare considers disposal of Early Learning Centre
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