Storehouse in pounds 62m stores deal
Friday 01 March 1996
There are 56 branches of Childrens World - but the business has made only one marginal profit since Boots first launched the concept nine years ago. Last year it made an operating profit of pounds 500,000 on sales of pounds 105m but has since slumped back into loss.
Storehouse will change the name to Mothercare and gradually expand the range of toys and equipment such as prams as well as bulk buys of disposable nappies. Five more stores are due to open this year. "We think we can make a lot of money out of it," the company said.
Storehouse plans to reduce costs by pounds 5m which will include some job losses at the Childrens World head office in Nottingham which employs 137 staff. Storehouse will make a provision of pounds 20m to cover the redundancies and other integration costs.
It is likely that Mothercare may resume its "Mothercare goes up to 10" offer in the out of town stores as there is more space to stock a wider range. Mothercare dropped the older ranges some time ago and has been concentrating on clothes for children up to age seven.
There are 269 branches of Mothercare in the UK almost all on the high street. However, the company has recently opened three stores on out of town retail parks - at Fosse Park, Leicestershire, Cheshunt, Herts and Chelmsford in Essex.
Keith Edelman, chief executive of Storehouse, said: "The purchase of Childrens World enables us to speed up the pace of development and gives us out-of-town opportunities."
The deal was applauded in the City which could see benefits on both sides. Sean Eddie, retail analysts at NatWest Securities said. "It is one of those rare birds where everyone is a winner. It is earnings enhancing on both sides."
Boots has removed a long-running dud from its portfoilio and achieved a better-than-expected price. Storehouse has picked up a chain of 50 good out- of-town sites which is a rare opportunity given current planning restrictions on out of town stores.
The deal gives Boots the opportunity to concentrate on its core business. However the company has still to come to grips with other under-performers. Do It All, the DIY chain is still losing money and is unlikely to attract a buyer. Fads and Homestyle are also struggling.
Boots shares closed 5p higher at 594p. Storehouse also finished 5p up at 310p.
- 1 Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 2 Disney announces new female-led film Moana
- 3 Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Video: Boxer Vido Loncar brutally assaults referee following defeat
Chicago voter tells Obama 'don't touch my girlfriend' – Obama stays super smooth
Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Oscar Pistorius: The brutal prison life that awaits disgraced athlete
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Support for EU membership 'at highest level since 1991 with most Brits wanting to stay in'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...