UK retailer Mothercare is in the process of acquiring CSHL, which owns and operates the Early Learning Centre, for approximately US$169 million. When the deal goes through Mothercare will operate the ELC outlets and, combined, the two infant/kid-focused retailers will have 435 UK stores and another 420 international franchises.
The goal for the new conglomerate is to further extend both brands outside of the UK. Additionally, Mothercare’s board expects the new entity to have better buying and sourcing power in the Indian and Hong Kong markets and improved in-house design capability. Finally, bringing together existing catalogue and online sales under one banner will be a focus. Currently the combined turnover in this sector for the pair sits at roughly US$120 million.
The directors expect the new group to deliver annual pre-tax earnings of US$16 million in the second full year after the acquisition. The deal is pending the approval of Mothercare’s shareholders.