Mother and baby specialist retailer Mothercare is in discussions to sell its pre-school business the Early Learning Centre (ELC).

Mothercare has hired Lazard to advise it as it holds talks with several parties on a cut-price sale of ELC, according to the Sunday Times.

The news follows speculation that emerged last week that Tesco was thought to have looked at acquiring Mothercare. It is thought the grocery giant has now put the plan on hold.

Early Learning Centre operates 40 stores. Mothercare bought the business in June 2007, but the partnership has struggled because of trading difficulties in the wider group, which is undergoing a turnaround under boss Simon Calver.

Mothercare issued a profit warning at the beginning of the month because of the “highly promotional” environment over Christmas.

For the 12 weeks to January 4, worldwide network sales fell 4.4% and group reported sales down 6.1%. Total UK sales were dropped 9.9% in the period and UK like-for-likes were down 4%.