Morrisons buys Kiddicare to bolster online strategy

Morrisons is to spend £70m on a leading retailer of baby products as it attempts to improve its online and non-food offerings under its new chief executive, Dalton Philips.

The UK's fourth biggest supermarket revealed yesterday that it is to buy Kiddicare as part of its new strategy.

The cash from the deal – which includes the rights to Kiddicare's technology platform – will be shared out among two generations of a Peterborough family, including Neville and Marilyn Wright, who founded the business in 1974. Morrisons will keep Kiddicare's current management team, notably Scott Weavers-Wright, the son-in-law of the founders, who remains as chief executive, and his wife, Elaine, the head of merchandising and buying.

The supermarket said it could "quadruple" the size of Kiddicare's business from its existing distribution centre and refused to rule out expanding its reach into Europe. More strategically, Morrisons plans to use the online retailer's platform to introduce its own non-food products, such as homewares, bedding and cooking kit from next year.

Morrisons is also in talks with the designer George Davies, who established Next in the 1980s, about launching a clothing range. Its wider general merchandise offer is dwarfed by that of Sainsbury's, Asda and Tesco. Yesterday, however, Mr Philips vowed to expand rapidly. "We are very small in non-food but the opportunity is massive out there," he said. However, he downplayed a launch into the online grocery sector, at least in the short term, adding: "Food and non-food are quite distinct at the moment."

Kiddicare posted underlying profits of £3m last year, on sales of £37.5m.