LONDON Tesco (TSCO.L) considered a bid for mother and baby products retailer Mothercare (MTC.L) to help reinvigorate its British hypermarkets, the Sunday Times reported.
Citing retail sources, the newspaper said Tesco examined a bid six months ago but has put the plan on hold. However, the recent fall in Mothercare's share price could rekindle Tesco's plan according to the City insiders - though they added Tesco has made no approach so far.
Tesco and Mothercare declined to comment on the report.
Mothercare warned earlier in January that full-year profit would reach only half of what analysts had expected, after record Christmas discounting and a drop in visitors to its stores hit sales and margins. The company's shares have fallen 42 percent over the past six months.
Tesco, the world's third biggest retailer, has also had a run of poor results and is 21 months into a turnaround plan for its main British business that has seen over 1 billion pounds ($1.65) invested in store revamps, more staff, new product ranges and pricing initiatives.
Tough competition for customers and pressure on consumer finances is putting pressure on British retailers, many of whom reported poor trading over the Christmas period.
(Reporting by Brenda Goh; Editing by Sophie Walker)