New Zealand clothing company Postie Plus Group (PPG) has reached a conditional agreement to sell its chain of Babycity stores to focus on growing its core operations.

PPG chairman Richard Punter said Babycity did not fit the group's business model or growth strategy.

"The sale of Babycity is an important step to reconcile our business model to that of Postie Group and our flagship retail brand," said Punter.

"We believe that the group should eventually be twice the size that it is today and while some of that growth will be organic, we intend to acquire complementary brands that we have identified to further develop our retail footprint nationwide."

The brand is being sold to Baby City Investments, a company operated by Trevor Douthett and owned by him along with "private equity supplied by persons he has known for over 20 years".

Completion of the transaction is targeted for early May, subject to shareholder approval.