Furniture chain snaps up Kiddicare for £8.5m

FURNITURE retailer Dunelm has more than doubled its online business after rescuing the struggling owner of the Kiddicare children’s range for £8.5m.

WS Group, which owns Worldstores, Achica and Kiddicare, was on the brink of collapse and would have fallen into administration if the deal had not been agreed.

The rescue package will see Dunelm inject £15m into online retailer WS Group, which employs 650 people and has a shop in Peterborough.

For Kiddicare, which sells cots, car seats, pushchairs and nappies, it marks the latest twist in its troubled history. After being bought by the supermarket chain Morrisons for £70m in 2011, it was sold for only £2m just three years later.

Morrisons had hoped the acquisition would boost the non-food side of its own online business, but its dire performance led the grocer to accept a £163m write-down at the end of its financial year.

Dunelm, which was started on a Leicester market stall in 1979 by Bill and Jean Adderley and now has more than 140 shops, has invested heavily in its online business and launched a click-and- collect service. The deal with WS Group will more than double the size of its internet business.

Dunelm is taking on a group which is expected to turn a loss of about £5m-£10m this year, but Dunelm said it expects it to break even under its first full year of ownership.

WS Group has annual sales of £100m, but had struggled to return a profit. Its largest brand, Worldstores, has more than 500,000 home and garden products on its site.

Dunelm chief executive John Browett said: ‘We are excited by this opportunity to accelerate the growth of our internet operation.’

Caroline Gulliver, an analyst at broker Jefferies, said: ‘The deal gives Dunelm access to £100m of sales. We think this is a good deal for Dunelm.’