(Bloomberg)—Destination Maternity Corp. canceled its bankruptcy auction and Marquee Brands LLC was declared the winner, making it likely that the chain’s stores will be shut down.
The cancellation was disclosed in a court filing Monday, signaling that no other qualified bids were received by last week’s deadline. Plans previously outlined call for Marquee to shutter the brick-and-mortar outlets but keep the brand alive online and possibly inside department stores.
Marquee will get the retailer’s name, website and other operating assets for about $50 million. Hilco Merchant Resources and Gordon Brothers Retail Partners would run store-closing sales at its remaining 235 locations, with thousands of jobs jeopardized, court papers show.
Shutting the stores would add to the so-called retail apocalypse that has claimed more than 9,200 stores among small and large retailers. The industry is suffering from online competition, fewer shoppers at malls and too much debt that was piled on before those trends sapped profitability.
The company filed for Chapter 11 bankruptcy in October with about 3,200 employees, 436 stand-alone stores and another 423 store-in-store locations, including Macy’s, buybuyBABY and Boscov’s, according to court papers. Less than a year earlier, it counted more than 1,100 retail locations in the U.S, Canada and Puerto Rico. Destination Maternity hasn’t posted an annual profit since 2014.
The fate of the employees wasn’t mentioned in the brief notice of the auction’s cancellation. A request for approval of key employee retention and incentive plans was filed Nov. 26 with a request to seal supporting documents. The court approved the seal request Monday. Under the proposed plans, the company is asking to pay an aggregate payout of $500,000 in retention payments to 37 key employees, and an aggregate payout of $500,000 in incentive payments to three key executives.
Destination Maternity is No. 525 in the 2019 Digital Commerce 360 Next 1000.Favorite