Mothercare in talks to buy stake in Aussie franchise

16th Jul 2010 09:34

Mother and baby retailer Mothercare is in talks to buy a 25% stake in Headline, which operates the Mothercare and Early Learning Centre franchises in Australia and New Zealand. The investment would be made by way of convertible loan notes with a value of A$12.2m, which will convert to shares in Headline subject to approval of its shareholders. The money would provide Headline with increased resources to accelerate the nationwide expansion of the Mothercare and Early Learning Centre brands in Australia and New Zealand.The deal is subject to due diligence and agreement of final documentation. Yesterday, Mothercare reported a 4.1% decline in first quarter UK like for like sales while international sales soared 20.3%. Overall group sales were up 0.4% during the 15 weeks ended 10 July. The group said the UK environment remained challenging, and the first quarter results were against strong comparatives of 5.1% growth the same time last year.