With no clear solution to its financial woes in sight, maternity and children’s product retailer Mothercare said it would focus on its own turnaround efforts. The announcement was made on Monday in the wake of U.S.-based Destination Maternity withdrawing its offer to acquire the British company. In a statement, the company said its board remains confident in the ongoing execution of Mothercare’s strategy as an independent company.
Last week Destination Maternity, owner of A Pea in the Pod and Motherhood Maternity stores, abandoned its UK ambitions after Mothercare’s board rejected two non-binding written proposals to merge the companies. The latest proposal offered $456 million in cash and stock for the company.
Ed Krell, chief executive officer and a director of Destination Maternity, said the company was disappointed that Mothercare shareholders did not support the proposal and at its unwillingness to allow a comprehensive appraisal of the business. Krell said, “We believe that there was a strong strategic rationale for the combination of these highly complementary businesses, which would have enhanced the product range of both companies, spanning the pregnancy to toddler life-cycle.” He added, “We further believe the combination would have created a global leader in maternity, baby and children’s apparel and products capable of accelerating the growth and long-term development of both businesses across channels and in markets around the world.”
Despite rising international sales, which grew 6.4% last year, Mothercare has been grappling with declining sales in its home country. Sales in the UK were down 7.5% to $785 million in the fiscal year that ended March 31. Additionally, it saw its stock dip 6 percent last Friday after Destination Maternity dropped out.