Destination Maternity Files For Bankruptcy Amid Mounting Debt And Online Competition

Another retailer has succumbed to bankruptcy, this time its maternity wear retailer Destination Maternity (DEST). The company filed for bankruptcy on Monday amid $244 million in mounting debt.

According to CNBC, Destination Maternity has been fighting against increased competition from retailers that have the resources to invest in their online brands. The company has reportedly been dealing with deteriorating finances and significant debt load, while its customer base decreases with the drop in the U.S. birth rate.

The retailer has struggled to maintain profitability, reporting a net loss of $14.3 million in fiscal 2018. The company employs about 1,100 full-time employees and 2,300 part-time workers. Its total store portfolio includes 458 locations as of February, according to its SEC filing.

Under the company’s umbrella are 362 Motherhood Maternity stores, 26 Pea in the Pod stores, and 70 Destination Maternity locations. A series of other stores are operated through franchise deals with other stores represented globally, the news outlet said. Destination Maternity also has apparel departments located in Macy’s and Bed Bath & Beyond’s buybuy Baby stores.

The company is working with advisors at Kirkland & Ellis and Berkeley Research Group to find a buyer as it moves through bankruptcy, according to a source for CNBC. If Destination Maternity is unable to find a buyer in bankruptcy, it will be forced to liquidate, the source said.

Shares of Destination Maternity stock was down 44.51 percent as of 2:20 p.m. ET on Monday.