Mothercare has sold the Early Learning Centre to the owner of The Entertainer for up to £13.5m.
The struggling retailer sold the brand to Teal Group as it does not have the “necessary capital, resources or scale” to continue to invest in Early Learning Centre own-brand toys.
In a statement today Mothercare added that it does not have the scale required to “construct a compelling product range to achieve acceptable margins” in a competitive market.
The embattled company, which reported plunging sales in an update to the market in January, also revealed that it is ahead of its store closure schedule.
Mothercare’s estate will have shrunk from 137 stores to 80 by the end of March, and the firm announced it had completed a round of redundancies head office job cuts at the end of last year.
Mothercare chief executive Mark Newton-Jones said: "We have made significant progress in recent months as we continue our strategic transformation to deliver a sustainable and profitable future for Mothercare.
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"This disposal of Early Learning Centre provides a further step towards eliminating our bank debt, and our new concession arrangements with The Entertainer will bring our customers an even stronger toys offer, both in stores and online. We look forward to working with the team at The Entertainer in the years to come.
"We will update further at our full year results in May."