// Mothercare offloads Early Learning Centre business to The Entertainer for £13.5m
// Sale will help slash some of Mothercare’s debt pile
// Mothercare also confirmed it was ahead of schedule with its CVA store closure scheme
Mothercare has offloaded its Early Learning Centre business to The Entertainer for £13.5 million to help slash its debt as part of its turnaround scheme.
The maternity and babywear retailer operates the Early Learning Centre in 80 of its stores in the UK, as well as 400 internationally via franchise partners, and online.
The Entertainer’s purchase of the Early Learning Centre includes its portfolio of toy brands, such as Happyland.
Meanwhile, Mothercare will retain around £6 million of Early Learning Centre stock to sell down and has struck an “arm’s length” concession deal with The Entertainer for the supply of toys to stores and online.
The retailer added that the deal was made on the back of a lack of scale and resources to develop Early Learning Centre’s toy ranges amid an “intensely competitive” market.
The sale is expected to help pay off around £17.5 million of Mothercare’s debt over the next year.
In the same update this morning, Mothercare said that its store closure plan – which was part of its wider CVA programme and launched last year – was ahead of schedule.
It said 57 stores were set to shut by the end of March, taking its estate down to 80 compared to 137 last May.
“We have made significant progress in recent months as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare,” chief executive Mark Newton-Jones said.
“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 Entertainer executive chairman Gary Grant said: “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.”