Marquee Brands has made an offer to buy Maternity apparel retailer Destination Maternity’s e-commerce business and other intellectual assets for approximately $50 million.
Destination Maternity Corp. filed a motion to approve the selection of Marquee Brands as the stalking horse bidder in its ongoing marketing and sale process. Marquee Brand’s would purchase the company’s e-commerce businesses, intellectual property, leased departments within department stores and baby specialty stores, strategic marketing partnerships and the right to designate certain inventory and related assets for sale by its partners, Gordon Brothers and Hilco Merchant Resources.
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.
Destination Maternity filed for Chapter 11 bankruptcy protection in October, with plans to close about 210 of its 446 locations. The retailer said in September it was considering a possible sale or merger after its second quarter 2019 sales fell nearly 12% year over year, driven by 61 store closures in the quarter and a 10.5% drop in comparable store sales.
Marquee Brand’s bid of approximately $50 million represents a baseline bid and is subject to higher or otherwise better offers in an open auction process.
To the extent additional qualified bids are received, Destination Maternity expects the auction, scheduled to take place on December 9, 2019, to be competitive. The deadline to submit qualified bids is December 5, 2019, and the company expects to seek court approval of the winning bid on December 12, 2019.
“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 member of Destination Maternity’s board of directors and the interim office of the CEO. “We are working to continue the sale process, including the auction, and look forward to an outcome that will maximize value for our stakeholders. Looking ahead, we remain focused on continuing to serve our loyal customers.”
Throughout the process, Destination Maternity expects its operations to continue.
In April, Marquee Brands acquired the Martha Stewart and Emeril Lagasse brands and all related intellectual property from Sequential Brands.