The Myer family will invest $5 million into small listed retailer Headline Group, which is rolling out iconic British maternity brand Mothercare in Australia.
The investment coincided with Headline’s announcement that it will acquire struggling baby retailer Babies Galore for $8.8 million, adding another 13 stores to Headline’s business and taking the company’s revenue towards $100 million.
Brent Dennison, the managing director of Headline Group (which trades as Mothercare Australia), told SmartCompany that the company has been in discussions with the Myer family for some time.
“We’ve been in a number of discussions with Myer… for four or five months about when was the right time to invest and how they would invest and this deal provided a synergistic opportunity.”
The Myer family will appoint a director to Headline’s board.
The first Mothercare store opened in Melbourne in March and has since launched a further 10 stores. Once the Babies Galore stores are converted over the next 18 months, there will be 31 Mothercare stores around the country, plus 29 Early Learning Centre stores, which sell education children’s toys.
“It’s been slow and steady in terms of that rollout of Mothercare, and then we’ll convert those Baby Galore stores,” Dennison says.
The Mothercare chain is famous in Britain for having trained midwives in store, something that has been a key part of the Australian rollout.
Dennison says the British brand owners, Mothercare Plc have continued store design and collateral, managers to train and oversee store openings and other staff training.
Mothercare Plc has been so happy with the rollout that in mid-July they invested $12.2 million in Headline Group, grabbing a 25% share.
“It’s been very positive and they are delighted with our rollout. We know there is a lot of focus on execution and implementation and… it’s certainly a three to five year project as an investor play, but we are very happy with the progress.”
According to BRW’s Rich 200 list, the Myer family is worth $1.9 billion. Its largest public investment is in the Myer department store business, but the family also owns an impressive property portfolio.
Allegro Private Equity will invest alongside the Myer family.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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