Baby bankruptcy (ka)boom: American retailer Destination Maternity Corporation has met Chapter 11. Our suspicions about their heightened financial risk via our proprietary FRISK® score, however, were born more than a year before their filing.
Formerly Mothers Work, Inc., the company operates a chain of maternity apparel specialty stores accross the U.S., Canada and Puerto Rico. We have seen Destination Maternity's FRISK® score drop gradually all the way down to a "1" earlier this summer, indicating a bankruptcy risk potential that was 10-to-50 times greater than the average public company:
Within this unique Bankruptcy Case Study, we'll provide a blow-by-blow breakdown of where things went wrong for Destination Maternity, and how our subscribers were given more than enough lead time to reduce/eliminate exposure to the company as their financial infrastructure crumbled.
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Our FRISK® score model incorporates four powerful risk inputs:
- “Merton”-type model of stock market capitalization and volatility
- Financial ratios, including those used in the Altman Z”-Score Model
- Bond agency ratings from Fitch, Moody's, and DBRS Morningstar
- Website click pattern data from CreditRiskMonitor® subscribers, representing key credit decision-makers at nearly 40% of current Fortune 1000 companies plus thousands of other large companies worldwide
Since the start of 2017, the FRISK® score’s rate of success in capturing public company bankruptcy is 96%. In any given year, you can count on one hand the times we miss – and in those outlier cases, the circumstances deal with unusual, unforeseen events such as natural disasters and CEO fraud.
Download the free report to learn more.
About Bankruptcy Case Studies
CreditRiskMonitor® Bankruptcy Case Studies provide post-filing analyses of public company bankruptcies. Our case studies educate subscribers about methods they can apply to assess bankruptcy risk using our proprietary FRISK® score, robust financial database, and timely news alerts.
In nearly every case, a low FRISK® score gave our subscribers early warning of financial distress within a one-year time horizon. Our proprietary FRISK® score predicts bankruptcy risk at public companies with 96% accuracy. The score is formulated by a number of indicators including stock market capitalization and volatility, financial ratios, bond agency ratings from Moody’s, Fitch and DBRS, and crowdsourced behavioral data from a subscriber group that includes nearly 40% of the Fortune 1000 and thousands more worldwide.
Whether you are new to credit analysis or have decades of experience under your belt, CreditRiskMonitor® Bankruptcy Case Studies offer unique insights into the business and financial decline that precedes bankruptcy.