Destination Maternity Corporation Provides Update on Corporate Restructuring
October 31 2018 - 9:00AM
Business Wire
Focus on Rationalizing Product Mix and Reducing
Costs
Expects Net Savings of $1.2 - $1.4 Million in
FY’19
Destination Maternity Corporation (NASDAQ:DEST) (the “Company”)
announced today a restructuring of the Company’s corporate product
and sourcing teams as part of its efforts to reduce costs following
ongoing rationalization of the Company’s overall product mix and
improvements in inventory efficiency. These efforts are expected to
yield net cost savings of approximately $1.2 million - $1.4 million
in fiscal year 2019. This restructuring is part of the initial
stages of Destination Maternity’s broader strategic plan focused on
improving its long-term growth and profitability.
Marla Ryan, CEO of Destination Maternity commented, “Recognizing
the need to focus our product assortment, rationalize costs and
improve inventory efficiency, we completed an in-depth review of
our product offer, overall inventory levels and distribution
channels. Through this effort, we identified profitable solutions
to improve our product mix and reduce inventory as we begin 2019.
We also made the difficult decision to reduce headcount in our
product and sourcing divisions to better rationalize resources and
costs across the organization.
“While these actions are never easy, the changes we are
implementing will enable us to become a leaner and more nimble
organization. They will also allow us to reallocate more of our
resources on becoming a digital flagship serving the needs of
today’s millennial moms and moms2be. While there is certainly more
work ahead of us, I am encouraged by what we have achieved to date
and the opportunities ahead.”
Destination Maternity expects the restructuring to result in a
one-time severance charge of approximately $0.5 million during the
third quarter of 2018.
Forward-Looking Statements
The Company cautions that any forward-looking statements (as
such term is defined in the Private Securities Litigation Reform
Act of 1995) contained in this release or made from time to time by
management of the Company, including those regarding various
business and financing initiatives, involve risks and
uncertainties, and are subject to change based on various important
factors. The following factors, among others, could cause actual
results to differ materially from those expressed or implied in any
of the forward-looking statements in this press release: the
strength or weakness of the retail industry in general and of
apparel purchases in particular; our ability to successfully manage
our various business initiatives; our ability to enter into
definitive documentation for the refinancing facility with Bank of
America in the timeframe expected or at all; our ability to
successfully manage our real estate relationships; overall economic
conditions and other factors affecting consumer confidence,
demographics and other macroeconomic factors that may impact the
level of spending for apparel (such as fluctuations in pregnancy
rates and birth rates), availability of suitable store locations,
our ability to develop and source merchandise and other factors set
forth in the Company’s periodic filings with the Securities and
Exchange Commission. Although it is believed that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct and persons reading this release are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this release. The
Company assumes no obligation to update or revise the information
contained in this release (whether as a result of new information,
future events or otherwise), except as required by applicable
law.
About Destination Maternity
Destination Maternity Corporation (Nasdaq: DEST) is the world's
largest designer and retailer of maternity apparel. As of August 4,
2018, Destination Maternity operates 1,114 retail locations in the
United States, Canada and Puerto Rico, including 480 stores,
predominantly under the trade names Motherhood Maternity®, A Pea in
the Pod® and Destination Maternity®, and 634 leased department
locations. The Company also sells merchandise on the web primarily
through its brand-specific websites, motherhood.com and
apeainthepod.com, as well as through its destinationmaternity.com
website. Destination Maternity has international store franchise
and product supply relationships in the Middle East, South Korea,
Mexico, Israel and India. As of August 4, 2018, Destination
Maternity has 188 international franchised locations, including 11
standalone stores operated under one of the Company's nameplates
and 177 shop-in-shop locations.
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version on businesswire.com: https://www.businesswire.com/news/home/20181031005235/en/
Sloane & CompanyDan Zacchei / Erica Bartsch,
212-486-9500Dzacchei@sloanepr.com / EBartsch@sloanepr.com
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