Destination Maternity Files For Bankruptcy, May Face Liquidation If Buyer Is Not Found

Destination Maternity has filed for bankruptcy due to a heavy debt load and fierce competition, according to CNBC. The retailer will try to find a buyer, but will likely be forced to liquidate if it is unable to secure a deal, according to people familiar with the matter.

Destination Maternity is burdened with challenges caused by both e-Commerce retailers and general population trends. Direct competition with companies like Zulily and PinkBlush have taken their toll, while subscription retailers like Le Tote have also pushed into maternity items. At the same time, the U.S. birth rate dropped to a 32-year low in 2018, according to the U.S. Department of Health and Human Services.

As a result, the maternity retailer’s financial results have been disappointing: sales declined 11.9% year-over-year in Q2 2019, leading the way for a net loss of $3.5 million. Sales were negatively impacted by both the net closure of 61 locations for the quarter and a 10.5% decrease in comparable sales. Destination Maternity currently has $260 million in total assets and $244 million in total debt, according to its bankruptcy filing.


The retailer ultimately planned to close 240 to 280 stores through fiscal 2022, including 117 closures in fiscal 2018. As of February 2019, Destination Maternity operates 362 Motherhood Maternity stores, 26 Pea in the Pod stores and 70 Destination Maternity stores. The retailer also runs maternity apparel departments inside Macy’s and buybuy Baby locations.

Additionally, leadership has been in turmoil at the brand. CEO Marla Ryan resigned in June after approximately one year, and was replaced with an interim Office of the CEO while the company searches for a replacement. The retailer also went through two interim CEOs in 2017 and 2018 prior to Ryan’s appointment.

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