FirstCry.com is in talks to buy the India franchisee right for UK’s kids products brand Mothercare from DLF Brands in a bid to bolster its presence in the growing kids’ products market, according to multiple people aware of the development.
Mothercare is the latest brand after Mango, Forever 21and Sephora among other global labels to change hands from DLF Brands. “The discussion between the two companies has been going on for some time now and has intensified in the past few weeks,” said one of the people directly aware of the matter.
He said that another high net-worth individual (HNI) — he declined to name — was also interested in acquiring the rights for the baby products company. In case the deal is finalised, DLF Brands will get a stake in FirstCry as part of the arrangement, said another person aware of the matter.
While DLF Brands and FirstCry denied any such deal between them, Mothercare declined to comment on the story. “We are not doing any deal with FirstCry.com,” said Timmy Sarna, managing director of DLF Brands in an emailed response to ET. “This is not true,” said Supam Maheshwari, founder of FirstCry. However, five different sources told ET that both the parties are indeed in talks.
DLF Brands had bought the franchise rights of Mothercare for 15 years, a UK-based retailer that sells products for expectant mothers and children and currently operates dozens of outlets, and through department store chain Shoppers Stop. FirstCry.com, which started off as an online player, later acquired offline retailer Mahindra’s BabyOye in 2016 for Rs 362.1 crore in a primarily stock deal, signalling its focus on building an offline presence.
Since then, it has been expanding through the franchisee route. In the financial year that it acquired Mahindra Retail, BrainBees Solutions, owner of FirstCry, saw losses soar to Rs 393 crore in FY 2017, from Rs 277 crore in FY 2016. The total revenue was Rs 239 crore for the period, a jump from Rs 173 crore the year before, according to Registrar of Companies’ filings.
ET had reported in September that FirstCry is in talks with multiple investors, including Temasek Holdings, to raise equity financing of about $100 million (Rs 665.27 crore), valuing FirstCry’s owner Brainbees Solutions at $400-500 million.
Source: Economic Times