Mothercare sells Early Learning Centre

TROUBLED RETAILER Mothercare is selling its Early Learning Centre business to toy chain The Entertainer as it ramps up turnaround efforts.

The group said it had agreed the deal for up to £13.5m in a move to help slash its debt pile.

The Early Learning Centre (ELC) is run within 80 Mothercare stores in the UK, 400 stores internationally via franchise partners, and online.

The acquisition also includes ELC’s portfolio of toy brands, such as Happyland.

But Mothercare will retain around £6m of Early Learning Centre stock to sell down.

It said the move will help it pay off around £17.5m of debt over the next year, while it has also struck an “arm’s length” concession deal with The Entertainer for the supply of toys to stores and online.

Mothercare – which is overhauling the business to boost its flagging fortunes – added that its swingeing store closure plan was ahead of schedule, with 57 stores set to shut by the end of March, taking its estate down to 80 from 137 last May.

Chief executive Mark NewtonJones said: “We have made significant progress in recent months as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare.”

The group said the ELC deal comes as it lacks the scale and resources to develop the toy ranges, amid an “intensely competitive” market.