Endless To End Morrisons' Kiddicare Troubles
A specialist investor in struggling retailers is close to clinching the takeover of a maternitywear chain owned by Wm Morrison, Britain's fourth-biggest grocer.
Sky News understands that Endless is on the verge of seeing off competition from a rival bidder for Kiddicare, which has posed a major headache for bosses at Morrisons since they bought it in 2011.
A deal had not yet been formally agreed with Endless on Wednesday evening, with Better Capital, the other remaining bidder, continuing to wait in the wings.
However, people close to the situation said that Endless and Morrisons could announce a transaction as soon as Friday.
Morrisons, which has labelled its acquisition of Kiddicare as an expensive "mistake", took a £163m impairment charge on the maternitywear specialist earlier this year.
City sources say Morrisons, which has also been hit by weak trading in its core business, is likely to have to pay a substantial dowry to the successful bidder.
The sale could include all 10 of the stores operating under the Kiddicare name, or may involve the closure of some of the sites prior to a deal being completed, insiders said.
Morrisons bought Kiddicare for £70m in 2011, arguing that the online business would aid its own transition to becoming a multi-channel retailer.
It then acquired 10 failed former Best Buy electrical goods stores set up as part of a joint venture with Carphone Warehouse.
The supermarket chain received a £40m payment from Carphone because of the store's onerous rent obligations, but the shops have struggled, while Morrisons' subsequent technology agreement with Ocado has rendered the use of Kiddicare's systems redundant.
Dalton Philips, Morrisons chief executive, came under pressure at the company's annual meeting last month when its former chairman, Sir Ken Morrison, questioned directors' competence.
Morrisons has also announced 2,600 job cuts in recent weeks as it tries to simplify store management, in contrast to plans by rivals such as Lidl, which is recruiting another 2,500 staff to accelerate its expansion.
Morrisons and Endless declined to comment.