Struggling Top 500 retailer Delia’s draws takeover interest
October 2, 2014 02:32 PM
Sept. 30 (Bloomberg) -- Delia’s Inc., the struggling clothing chain that caters to teenage girls, rose the most in more than a year after saying it received “several” inquiries about a takeover of the company.
The interest has prompted the board to explore strategic alternatives, including a sale or merger, according to a statement today. The New York-based company also is considering pursuing debt and equity financing. The announcement sent the shares up as much as 36%.
An acquisition would give a new life to a chain that said this month there was “substantial doubt” about its ability to continue operating. The retailer, hurt by sluggish mall traffic and slow website orders, warned in a filing that it might not have enough cash to last the next 12 months.
The shares jumped as high as 33 cents, marking the biggest intraday gain since May 2013. Before today’s gain, the stock lost almost three-quarters of its value this year. Delia’s market value had fallen below $18 million as of yesterday’s close.
“We maintain our belief that Delia’s can fulfill its potential as an authentic brand with a unique competitive position in the marketplace,” Chief Executive Officer Tracy Gardner said in today’s statement.
Delia’s in No. 339 in the Internet Retailer Top 500 Guide.