Destination Maternity filed for Chapter 11 bankruptcy protection Monday, as the apparel company hopes to avoid the growing graveyard of fashion retailers felled by expensive leases and digital competition.
The retailer operates stores under several brands, including Destination Maternity, Motherhood Maternity and A Pea in the Pod.
The company had 446 stores in the U.S., Canada and Puerto Rico as of Aug. 3. It also operated 491 shops-within-a-shop at various department stores and baby specialty retailers.
The company plans to close 183 stores after already shuttering 27 recently, according to a court filing. Bankruptcy allows companies to escape unprofitable leases.
Founded as a mail-order catalog business called Mothers Work in 1982, the company went public in 1992, acquired the Motherhood Maternity and A Pea in the Pod brands in 1995 and expanded rapidly in the years thereafter.
But the company, in a court document, blamed the retail industry’s turmoil, declining birth rates, high rents and leadership turnover for faltering. The company has had five CEOs in the last five years.
Destination Maternity declined further comment and declined to release a list of locations set to close.
In its bankruptcy petition, Destination Maternity listed $260.2 million in assets and $244 million in debts.
The company’s stock, traded on the Nasdaq, plunged 44% to 19 cents as of 2:10 p.m.
Other fashion retailers that have filed for bankruptcy in 2019 include Forever 21, Charlotte Russe and Payless ShoeSource.
More store closings coming: An estimated 12,000 shops could close by the end of 2019
In its most recent fiscal quarter, which ended Aug. 3, Destination Maternity reported a year-over-year revenue decline of 11.9% and a net loss of $3.5 million.
Published by USA Today, Oct. 21, 2019
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