Morrisons takes baby steps online with Kiddicare deal

The supermarket has forked out £70m for the baby products website. But it's not just the high-chair market that appeals...

by Emma Haslett
Last Updated: 06 Nov 2012
Has Morrisons come over all broody? The supermarket has just spent £70m on online baby products retailer Kiddicare.com - something of a departure for Britain’s fourth-largest retailer, which currently has a strictly food-focused offering. So what does Morrisons want with a website peddling babygros? Well, back in September, CEO Dalton Philips said that online would be a key part of his long-term growth strategy for the business. Buying Kiddicare doesn't just mean getting its hands on a growing business - it's also a ready-made online launch pad...

Morrisons’ move into online retail has been mooted for a while now. Recent speculation has suggested it might be sniffing around online grocer Ocado, particularly after its biggest shareholder, John Lewis, sold up its remaining stake in the company last week. However, Kiddicare is an equally viable - and no doubt much cheaper - strategic option, offering a similarly ‘state-of-the-art’ distribution centre and online sales platform. So it should be able to teach Morrisons a lot about online retail, as Philips acknowledged today: Kiddicare is, he said, a ‘robust, scalable and highly advanced technology platform around which we can begin to build our e-commerce offer’. Building its own capability from scratch would be an expensive and time-consuming business; this way it can benefit from Kiddicare's knowledge and experience. 

Although it's going to be under new ownership, this won't be the end of the Kiddicare brand; it will continue to trade separately to Morrisons, and husband-and-wife founders Neville and Marilyn Wright will stay on to oversee the transition. Kiddicare has really bucked the retail trend lately: founded in 1974 and based in Peterborough, where it owns 160,000 sq ft worth of retail, warehouse and office space, the company has grown by a whopping 75% over the past three years, boosting turnover to £37.5m. (Worth noting here that the price Morrison's is paying is just under twice that - which is, incidentally, about as much as the average Morrison's store makes per year. In other words: if anything goes wrong, that'll be an expensive mistake). seems The website now accounts for 80% of its sales - about 40,000 customers a month. 

So you can see the attraction as far as Philips and Morrisons are concerned. Though we can't help wondering what old Sir Ken Morrison thinks; in the past, the company’s (nearly octogenarian) founder has famously dismissed the idea of home delivery, saying it was something he did on a bicycle when he were a lad. Good job he's not still in charge.

Morrisons takes baby steps online with Kiddicare deal

 

The supermarket has forked out £70m for the baby products website. But it’s not just the high-chair market that appeals...

 

Has Morrisons come over all broody? The supermarket has just spent £70m on online baby products retailer Kiddicare.com - something of a departure for Britain’s fourth-largest retailer, which currently has a strictly food-focused offering. So what does Morrisons want with a website peddling babygros? Well, back in September, CEO Dalton Philips said that online would be a key part of his long-term growth strategy for the business. Buying Kiddicare doesn't just mean getting its hands on a growing business - it's also a ready-made online launch pad...

 

Morrisons’ move into online retail has been mooted for a while now. Recent speculation has suggested it might be sniffing around online grocer Ocado, particularly after its biggest shareholder, John Lewis, sold up its remaining stake in the company last week. However, Kiddicare is an equally viable - and no doubt much cheaper - strategic option, offering a similarly ‘state-of-the-art’ distribution centre and online sales platform. So it should be able to teach Morrisons a lot about online retail, as Philips acknowledged today: Kiddicare is, he said, a ‘robust, scalable and highly advanced technology platform around which we can begin to build our e-commerce offer’. Building its own capability from scratch would be an expensive and time-consuming business; this way it can benefit from Kiddicare's knowledge and experience. 

 

Although it's going to be under new ownership, this won't be the end of the Kiddicare brand; it will continue to trade separately to Morrisons, and husband-and-wife founders Neville and Marilyn Wright will stay on to oversee the transition. Kiddicare has really bucked the retail trend lately: founded in 1974 and based in Peterborough, where it owns 160,000 sq ft worth of retail, warehouse and office space, the company has grown by a whopping 75% over the past three years, boosting turnover to £37.5m. The website now accounts for 80% of its sales - about 40,000 customers a month. 

 

So you can see the attraction as far as Philips and Morrisons are concerned. Though we can't help wondering what old Sir Ken Morrison thinks; in the past, the company’s founder has famously dismissed the idea of home delivery, saying it was something he did on a bicycle when he were a lad. Good job he's not still in charge.

 

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