Destination Maternity approves stalking horse bid; would close all remaining stores
A brand acquisition and licensing firm has made an offer to buy the brand name, online business and other intellectual assets of Destination Maternity for approximately $50 million.
The bankrupt retailer announced it has made a motion to approve the selection of Marquee Brands as the stalking horse bidder in its ongoing marketing and sale process. (In April, Marquee Brands acquired the Martha Stewart and Emeril Lagasse brands and all related intellectual property from Sequential Brands.)
Destination Maternity filed for Chapter 11 bankruptcy protection in October, with plans to close about 210 of its 446 locations. The retailer, whose filing listed $260 million in assets and $240 million in debts, has seen its sales decline in recent years amid a declining U.S. birth rate, increased competition and changing consumer behaviors. A heavy debt load added to its struggle.
Marquee Brands and a group composed of Hilco Merchant Resources and Gordon Brothers Retail Partners entered into an asset purchase agreement with a proposal to purchase Destination Maternity’s e-commerce business, intellectual property, leased departments within stores operations and the right to designate the sale of certain inventory and related assets.
The agreement provides for the buyer to sell or otherwise designate the disposition of inventory, fixtures and equipment and the designated assets through store closing sales at Destination Maternity’s 235 stores where closing sales are not already in process, and will oversee the wind down of Destination Maternity’s leased stores.
Marquee’s bid of approximately $50 million is to a higher bid at bankruptcy auction, which is scheduled to take place on December 9. The deadline to submit qualified bids is December 5.