Monday, 28 April 2014

Morrisons share price: Kiddicare losses pile pressure on management

Otmane El Rhazi, Monday, April 28: Wm Morrison Supermarkets (LON:MRW) is facing a £160 million write-down on Kiddicare, as it attempts to offload the baby products chain. The Sunday Times yesterday reported that the size of the losses could increase pressure on the board of Britain’s fourth-largest supermarket. The management of the company has recently come under fire from investors who have questioned the stewardship of chairman Sir Ian Gibson and CEO Dalton Philips.

Morrisons bought Kiddicare for £70 million in 2011, but announced last month that the chain no longer fitted with its strategy and its poor financial performance will take time to address (Morrisons share price: Retailer hires Rothschild as adviser on Kiddicare sale). As a result, Morrisons revealed a charge of £163 million, including provision for onerous leases. Kiddicare is currently believed to be losing about £2 million a month, raising questions about the chain’s long-term survival. However, according to retail sources cited by The Sunday Times, the baby products retailer has attracted interest from several turnaround funds.

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