News Column

Business analysis: Buyout retreat: Destination Maternity's attempt to take over Mothercare was ridiculous from the off, says Nils Pratley

August 12, 2014

Nils Pratley

Call it the curse of Mothercare. Ed Krell, the chief executive of US group Destination Maternity, has left to "pursue other opportunities", six weeks after he somehow saw an opportunity to bid for the UK baby clobber chain.

The takeover attempt was ridiculous from the off. Destination was, and still is, the smaller company and its shares had been falling in value all year, and thus were never likely to be an acceptable currency for Mothercare's shareholders. Within a week, Destination had injected fresh farce into proceedings by issuing a profit warning caused by competition in the market for "active bottoms with elastic waists". Retreat inevitably followed.

In terms of share price, Krell's six-year record looks decent. But the signing-off statement made no mention of Mothercare. Destination's board, one assumes, is embarrassed to discuss it.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Guardian (UK)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters