Mothercare Shares Plunge 11% as Destination Maternity Drops Takeover Bid

Mothercare shares plunged by nearly 11% in early trading after the group confirmed that US retailer Destination Maternity dropped its bid to take over the embattled group.

The Mothercare stock price dropped to as low as 228.25p within the opening session after the group officially confirmed that Destination Maternity does not intend to make an offer for the group and that it has not had any contact with the US apparel retailer since 3 June 2014.

It added that "with the appointment of Mark Newton-Jones as chief executive, Mothercare is now fully focused on the company's plan to turnaround the UK business and to continue its strong International growth. The board remains confident in the ongoing execution of Mothercare's strategy as an independent company."

In May this year, Mothercare beat analysts' full-year profit forecasts, but the group has been dogged with debt restructuring rumours, an overall slump in sales and the loss of its leader Simon Calver.

In February this year, Mothercare's boss Calver announced his shock immediate departure only one month after the British baby products retailer unveiled an annual profit warning.

In January Mothercare shares plunged by nearly 30% after the retailer said that group sales fell 6.1% in the 12 week period to 4 January, compared to the same period the year before.

Mothercare, which operates in some 60 countries, said a drop in the underlying sales in its British business was because the UK business is in the middle of a turnaround plan.