MOORESTOWN, N.J.--(BUSINESS WIRE)--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.
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.