Monday, July 21, 2014

News: Kiddicare store closure threat - reports

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The new owner of Kiddicare, the UK's leading specialist online retailer of baby products, has admitted that it could close its loss making stores - including the 45,000 sq ft store at Parkgate Shopping in Rotherham.

Last week, Endless LLP, a leading investor in non-core acquisitions, acquired Kiddicare from its parent organisation, Wm Morrison Supermarkets PLC for £2m and national retail industry magazine, Retail Week has reported on store closure proposals and the notion that Kiddicare would have entered administration had it not been sold.

Garry Wilson, managing partner at Endless told Retail Week: "It is a difficult situation with store closures. But every store is heavily loss-making. We're not closing stores for the sake of it. We’ve been tasked with performing surgery.

"Fundamentally Kiddicare is a good ecommerce business and we need to make sure it's not dragged down by the heavily loss-making stores."

The award-winning online retailer was acquired by Morrisons in 2011 for £70m and was the first step in developing the Morrisons online business. In 2012 it was announced that Morrisons had agreed to take over the leases of ten former Best Buy stores from Carphone Warehouse, including the large unit at Parkgate.

Investment of around £15m converted the stores to the full Kiddicare offering and added them to its existing flagship store in Peterborough – the largest kids store in Europe. The company estimated that around 700 new jobs were created across the country and the Rotherham store opened at the end of 2012.

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After launching its own online offering with Ocado, Morrisons announced in February 2014 that it was making a "planned exit from non-core activities, including Kiddicare." Exceptional non-reccuring costs of £163m relating to Kiddicare were also reported.

Best Buy joined with Carphone Warehouse in 2008 to create Best Buy Europe, and to launch the Best Buy brand in the UK. They operated 11 "Big Box" stores on a trial basis but they were not profitable. Taking over the former Homebase store at Parkgate Shopping, it created around 100 new jobs when it opened in June 2011. It had closed by the end of the year. It appears that history could be repeating itself with Kiddicare.

The news comes as Rothbiz reported just last week that a potential deal with discount retailer, Poundland, would see the popular shopping park become 100% let.

Kiddicare website
Parkgate Shopping website

Images: Kiddicare

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