Mothercare sells Early Learning Centre to The Entertainer

Baby and maternity retailer Mothercare is selling its Early Learning Centre toy 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.

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

The retailer said the move would help it pay off around £17.5million 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 Newton-Jones said: “We have made significant progress in recent months as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare.

“This disposal of Early Learning Centre provides a further step towards eliminating our bank debt, and our new concession arrangements with The Entertainer will bring our customers an even stronger toys offer, both in stores and online.”

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

Gary Grant, founder and executive chairman of The Entertainer, said the firm would look to “bring new life” to the ELC brand. He added: “By combining our experience with that of ELC’s passionate and capable partners around the world we look forward to re-invigorating the brand for generations to come.”