Morrisons moves on from Kiddicare experiment

When Morrisons spent £70m on nursery pureplay Kiddicare.com, chief executive Dalton Philips said the acquisition marked the beginning of its ecommerce business. With Kiddicare, he said, came “a robust, scalable and highly-advanced technology platform around which we can begin to build our ecommerce offer.”

Back in 2011, the supermarket had urgent ground to make up since it was then the only one of the big four grocers that did not yet have an online grocery shopping service. But more than three years on, the company this week said it had sold Kiddicare.com for £2m, and that £163m should cover the costs associated with its exit from the business.

Some of that total is related to store lease liabilities: under Morrisons’ ownership the company opened 10 new large format stores, in addition to its original Peterborough showroom, as it looked to make the company a multichannel one. But the Kiddicare acquisition has been an expensive experiment that ultimately didn’t work out.

Morrisons, of course, did ultimately launch a long-awaited and still expanding grocery service in January this year, through a tie-up with another pureplay, Ocado, and Kiddicare became surplus to requirements. Morrisons said it was looking to sell it in its March 2014 full-year results.

Over the last year, key Kiddicare staff have left, with Scott Weavers-Wright, chief executive of Kiddicare at the time of the sale, leaving to found technology incubator Haatch last October. Simon Harrow, previously head of digital development at Kiddicare, left to join Haatch after Morrisons’ March announcement.

Kiddicare’s new owner Endless, seems to have got a good deal, however. When Morrisons bought the company for £70m, it had turned over £37.5m in the financial year of 2010. But in the year to February 2014, Endless said, it turned over around £80m.

“Kiddicare has a history as a trusted brand in the children’s market,” said Garry Wilson, managing partner of Endless. “We will be working hard with management to grow the business over the long-term.”