EToys Is Giving Up Its BabyCenter

Mar 02 2001

EToys is selling its BabyCenter unit, a group of content sites for new and expecting parents, to health care products giant Johnson & Johnson for about $10 million in cash, the company announced Friday.

The sale comes after weeks of unsuccessful efforts by eToys to sell itself, following a disappointing holiday season. The company, whose shares have fallen to 9 cents, is saddled with about $280 million in debts.

Earlier this week, eToys said it will soon file for bankruptcy. At that time, the Santa Monica, Calif.-based toy retailer halted trading in its shares, saying they likely will become valueless.

BabyCenter has long been praised for the quality of its parenting content. The BabyCenter unit comprises the BabyCenter.com site, as well as ParentCenter.com and BabyCenter.co.uk.

The BabyCenter store, which is operated from eToys' warehouses, is not part of the transaction and will be temporarily closed, according to the sources.

Johnson & Johnson, of New Brunswick, N.J., plans to keep BabyCenter's San Francisco location. The company also plans to retain current BabyCenter employees and expects to expand the unit.

With approximately 98,500 employees, Johnson & Johnson is the world's largest maker of health care products, selling to consumers as well as to the pharmaceutical and professional markets. It has more than 190 operating companies in 51 countries around the world, selling products in more than 175 countries. Babycenter will become part of Johnson & Johnson Consumer Companies.

EToys acquired BabyCenter shortly before going public in May 1999, after a bidding war with rival Amazon.com , which also was interested in the site.