Sainsbury’s eyes Mothercare takeover

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Mothercare

Sainsbury’s has allegedly eyed a possible a takeover of embattled maternity and babywear retailer Mothercare.

According to the Press Association, the UK’s second largest supermarket’s deals team has been keeping an eye on Mothercare for the last few months, with a view to make a potential acquisition.

However, a formal offer has not been tabled and the Retail Gazette understands that Sainsbury’s did not take the possible acquisition seriously.

The news has sent shares in Mothercare skyrocketing 17 per cent to 20.5p per share.

Mothercare is currently valued at around £30 million.

This comes as Sainsbury’s seeks to expand its offering, coming close to acquiring Nisa last year and adding Argos and Habitat to its roster amid a £1.4 billion deal in 2016.

In addition, it has been working to improve its Tu clothing arm in recent months, which now contributes over £1 billion to its annual sales.

It also marks more good news for Mothercare, which announced yesterday it had hired turnaround expert and former Tesco executive David Woods to lead its recovery, opting to oust Mark Newton-Jones due to his lackluster turnaround efforts.

However, the maternity retailer still has a long way to go to avoid becoming another high street casualty.

It recently appointed KPMG to help secure waivers on its loan agreements alongside additional sources of funding, and reported losses of £600,000 in its interim results last year.

Sainsbury’s and Mothercare have declined to comment.

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1 COMMENT

  1. BAD MOVE if it does. The only possible reason is Mothercare has a few, but only a few retail units that Sainsbury’s would convert to Sainsbury’s. People are not as daft as they used to be and are getting second hand prams on ebay or buying things cheaper from Amazon.

    I think Mothercare is struggling in the internet era and many of their stores are shabby, leading to customers varying perception of the brand. I think Sainsbury’s will just convert most stores to supermarkets and shut the rest… maybe have a flagship store in London and that it.

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