Mothercare’s US suitor sends second profit alert

 

The chances of a new approach from the American suitor of Mothercare slimmed yesterday after the Nasdaq-listed company issued its second profit warning this year.

Mothercare’s US rival Destination Maternity recently made two spurned approaches to the British retailer, detailing plans to take over its loss-making stores and move its Philadelphia base to the UK to take advantage of lower taxes.

But Destination, with about 1,900 outlets in the US, yesterday missed Wall Street forecasts and revealed a net sales slump of 6 per cent to $134m (£78m).

Destination said it could not update its 2014 profit and earnings guidance due to the provisions of the UK Takeover Code but said “as a result of the weakness in sales results” as well as “weakness in gross margin due to higher-than-planned price promotional and markdown activity” it expects earnings and profit for 2014 to be “below the guidance ranges provided”.

It said it will issue the full update on its third quarter by no later than 11 August.

Its chief executive Ed Krell said its sales were “considerably weaker than planned”. He blamed a “continued difficult overall economic and retail environment, resulting in decreased store traffic”.

He added that many pregnant women were opting for clothes that were not specifically maternity clothes because current fashions such as “maxi dresses, baby doll dresses and oversized peasant-style woven tops” could “more readily fit a pregnant woman than typical non-maternity fashions”. Destination also issued a profit warning in April and yesterday its shares fell 10 per cent during morning trade in the US.

It is the largest maternity retailer in the world and has more than 575 stores trading as Motherhood Maternity, A Pea in the Pod and Destination Maternity.

The Takeover Panel has given Destination until 30 July to table a firm offer or walk away from Mothercare.

Mothercare, which yesterday confirmed its interim chief executive Mark Newton-Jones had got the job on a permanent basis, has won support in its rejection of Destination from a large number of its shareholders. Shareholders Allianz and Fidelity recently spoke out in support of management.

Mothercare  has had a tough few years and issued its latest profit warning in January. It has been cutting its store numbers in the UK.

Destination’s last approach was 300p a share, which Mothercare rejected. Mothercare’s shares closed up 6.3 per cent to 287p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

Tribal gathering

Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

Gaza, a year on from Operation Protective Edge

A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

Illnesses, car crashes and suicides

Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
Srebrenica 20 years after the genocide: Why the survivors need closure

Bosnia's genocide, 20 years on

No-one is admitting where the bodies are buried - literally and metaphorically
How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

Power of the geek Gods

Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
What do strawberries and cream have to do with tennis?

Perfect match

What do strawberries and cream have to do with tennis?
10 best trays

Get carried away with 10 best trays

Serve with ceremony on a tray chic carrier
Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

Team Murray firing on all cylinders for title assault

Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

Nick Bollettieri's Wimbledon Files

Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
Ashes 2015: Angus Fraser's top 10 moments from previous series'

Angus Fraser's top 10 Ashes moments

He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high