Reliance Brands is set to acquire distribution rights of UK-based kids products company Mothercare in India as the Reliance Industries-owned unit may have a better offer than FirstCry.com, reported Economic Times.
FirstCry.com was in advanced stages of talks with DLF Brands, which currently operates Mothercare outlets in India, for acquiring the UK-based retailer’s distribution rights. However, Reliance came up and snapped up the rights, two people aware of the matter told the paper.
If the deal comes across, Reliance Industries will control all Mothercare outlets in India, which are currently run by DLF Brands, the report said.
DLF Brands and Reliance Brands did not respond to an email query and Mothercare declined to comment.
Several global brands including Mango, Forever 21 and Sephora have shift hands from DLF Brands in the Indian retail market. The local franchisee rights of Mango was acquired by online fashion retailer Myntra.com last year, while Forever 21’s India business was acquired by the Aditya Birla Group in 2016.
DLF Brands had bought the franchise rights of Mothercare for 15 years in 2009. Currently, Mothercare operates through dozens of outlets and department store chain such as Shoppers Stop in India.
FirstCry.com was interested in acquiring Mothercare’s distribution rights in India to mark its presence in the growing kids product market. The UK-based multinational specialises in products for expectant mothers and children up to 6 years old.
The market for baby and mother care products is growing on account of urbanisation, which has led to a rise in the number of nuclear families with both parents working. As a result, per capita expenditure on mother and child care has increased.
According to RNCOS, a business consulting service firm, India’s baby care market is expected to post a CAGR of over 15 percent during 2015-2022.
In 2017, Mothercare’s international sales during the crucial Christmas trading period declined 3 percent year-on-year, while like-for-like sales in the UK fell 7.2 percent and online sales dropped 6.9 percent.
The retailer reduced its total number of stores and discounted heavily in its end-of-season sale in its home country, according to reports.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media Investments Ltd.