Destination Maternity seeking auction sale by December 9
today Oct 30, 2019
Just over a week after filing for Chapter 11 bankruptcy, Moorestown, New Jersey-based maternity apparel retail group Destination Maternity Corporation has sought court approval for a sale by auction to take place in early December.
According to a Reuters report published on Monday, Destination Maternity has requested an order for bidding procedures for a sale including an auction by December 9.
In order to comply with terms set by lender Wells Fargo Bank NA, the retailer has also reportedly stated that it aims to close a sale by December 31.
First announced on October 21, 2019, Destination Maternity’s bankruptcy filing at the Bankruptcy Court for the District of Delaware was accompanied by news that the retailer could be closing up to a third of its 446 stores, spread across the U.S., Canada and Puerto Rico.
The company, which has had five different CEOs in as many years, cited this accelerated leadership turnover, along with declining birth rates and expensive leases as the reasons behind its recent struggles.
The retailer first alluded to the possibility of a sale when it reported disappointing second-quarter results in September, posting an 11.9% decrease in quarterly revenues, which totaled $84.9 million, and a net loss of $3.5 million.
But the results were only the latest sign that the “Destination -> Forward” turnaround plan unveiled by the company at the end of last year was failing to get the Destination Maternity’s finances back on track, as cost-cutting measures had already proved insufficient to make significant progress in turning the retailer's losses into profit.
Destination Maternity, which, as well as its namesake brand, also owns the Motherhood Maternity and A Pea in the Pod banners, has said that it intends to continue operating throughout the bankruptcy process.
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