HMC Capital has bought a 10.29 per cent stake in Baby Bunting, the baby products retailer, making it the second largest substantial shareholder of the company.

According to the annual report last year, AustralianSuper leads the substantial shareholders of Baby Bunting, followed by Bennelong Funds Management Group.

However, a May 9 disclosure stated that Bennelong Funds Management Group has ceased to be a substantial shareholder of the company.

HMC Capital’s acquisition comes amid Baby Bunting’s falling sales, which the retailer blamed on cost-of-living pressures.

“Our focus on customer experience and simplification of the business continues. We continue to look for opportunities to align the cost profile with the group’s sales trajectory and future growth plans,” said Baby Bunting CEO and MD Mark Teperson prior to the acquisition announcement.

Baby Bunting previously reported a 7.7 per cent comparable store sales decline in the fiscal second half.

“While we have seen an improving trend in transactions in 2H compared to 1H, this was heavily impacted by a declining average transaction value driven by consumers trading down and ongoing competition in nursery essentials impacting market price,” said Teperson.