Destination Maternity Corp., the Moorestown-based operator of pregnancy-wear stores and department store boutiques, has asked the U.S. Bankruptcy Court in Delaware to name Marquee Brands LLC as its prospective buyer, in case a planned auction of the company next Monday fails to attract more bidders.
As “stalking-horse” bidder, Marquee, based in New York, has agreed to pay at least $50 million for Destination assets. The stock was as high as $31 a share in October 2013 and closed Monday at $0.063.
Marquee has offered to buy Destination Maternity’s e-commerce, brands, and systems, leased department store and baby-specialty store boutiques, marketing partnerships, and inventory sales rights, which could leave the company’s 250 remaining full-service stores to close. The company runs Motherhood Maternity, Pea in the Pod, and Destination Maternity stores.
Greenhill & Co., the investment bankers running the sale, and the spokespeople putting out Destination’s sale documents didn’t immediately respond to inquiries about what would happen to retail workers. The company said it had around 1,100 fulltime and 2,300 parttime workers as of last April, but has since closed around 200 stores.
Would-be rival buyers have until Thursday to contact the company’s investment bankers at Greenhill.
The bankers and advisers Gordon Brothers and Hilco Merchant Resources expect to name the winner, pending court approval, on Dec. 12.
Depending on who the buyer is, Destination may lay off up to 430 workers at its Moorestown headquarters, plus 212 at its Florence, Burlington County, warehouse, the company told the New Jersey Department of Labor in a federal WARN Act notice in October.
Marquee, owned by investment firm Neuberger Berman, has collected a series of retail brands in transition since it was set up five years ago. Earlier this year, it bought the Martha Stewart home goods lines and the Emeril Lagasse food products business. Marquee also owns Bruno Magli shoes and the BCBGMaxAzria, BCBGeneration, Ben Sherman, Body Glove, and Dakine clothing lines.
“We are pleased that Marquee Brands recognizes the value of our business and has made a competitive bid during our marketing and sale process,” said Lisa Gavales, a Destination Maternity board member and part of the interim top management group since former CEO Marla Ryan’s departure in June.
Gavales added that the board anticipates “an outcome that will maximize value for our stakeholders. Looking ahead, we remain focused on continuing to serve our loyal customers.”
Destination Maternity abandoned its former Navy Yard and Center City locations in Philadelphia for $40 million in New Jersey tax incentives over 10 years, starting in 2013.
Destination Maternity, whose websites include Motherhood.com, has faced a declining U.S. birthrate, competition from online retailers, and higher import costs amid the U.S.-China trade war.
The Conshohocken-based bridal and prom dress retailer David’s Bridal has faced similar social, technological, and foreign-trade factors and transferred ownership to its dress suppliers and other creditors in order to reduce its crushing debt load under chief executive Jim Marcum earlier in the fall.