Clothing retailer Postie Plus says it is in early talks to buy other New Zealand clothing companies.
Postie Plus on Wednesday announced plans to sell its Babycity chain, which has 18 stores.
The company said Babycity has struggled to make a profit and it has a conditional agreement to sell the chain to a firm run by former LV Martin chief executive Trevor Douthett.
Postie Plus lost $775,000 in the six months to the end of January 2012, a fall of 3.5% on the same period a year ago, due to weaker sales and the closure of some Babycity stores.
Chief executive Ron Boskell says the sale will allow the company to reduce debt and expand the flagship brand as well as acquire other companies.
He says Postie Plus has been talking to some "good solid brands" known around New Zealand.
Nothing was concrete yet, Mr Boskell said, but in the coming months the company would become more engaged with those Postie Plus thought could offer the best opportunity for growth and profit.
He says the company expects to sign deals in 2012.