Waterstone buys Early Learning for £62m

Jason Nisse
Sunday 04 April 2004 00:00
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Tim Waterstone, the founder of the eponymous books chain now owned by HMV, yesterday led a deal to buy the children's retailer Early Learning Centre for £62m.

He will merge the business with his upmarket children's chain, Daisy & Tom's, to create a powerhouse that will challenge the market leader, Mothercare. The combined group will have over 200 stores and a turnover of around £120m a year.

Mr Waterstone's Eagle Retail Investments will join forces with DC Thomson, publisher of The Beano, the venture capital house Rhone Group, and Nigel Robertson, the former Marks & Spencer executive who founded Ocado, the online grocery retailer.

The investment group will also buy Daisy & Tom's, which is owned by Mr Waterstone himself, and will run this and Early Learning Centre together.

The price represents a 200 per cent profit on the £20m paid by venture capital group 3i and the management, led by Mike France, when they bought the operation from John Menzies in 2001. Since then they have refocused Early Learning Centre's product range, increased the number of products sourced from the Far East and expanded sales through online retailing and deals with Debenhams and J Sainsbury.

Graham Miller, a director of 3i, said Mr France and his team was "one of the best managements we have ever worked with" and he hoped to back them in future deals. Mr Waterstone said he would continue the transformation of Early Learning Centre, and that it was a great brand but "it needs a bit of a creative rethink".

"We will be re-emphasising some of the educational elements of the business," he said.

Last year Mr Waterstone was outbid in an attempt to buy Hamleys, the toy retailer, for £53.3m.

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