US: Mothers Work to streamline brands, cut jobs
In a bid to cut its annual costs by $5m, maternity wear retailer Mothers Work Inc yesterday (1 July) unveiled plans to restructure its business by axing the Mimi Maternity brand, streamlining its stores and inventories, and cutting jobs at its Philadelphia headquarters.
Key to its proposals it intends to rename its 92 Mimi Maternity stores under its A Pea in the Pod or Destination Maternity nameplates from next January.
As part of the changes the company will also streamline its merchandise, with the Mimi Maternity line being re-branded as A Pea in the Pod starting with the spring 2009 range.
It will also develop a more upmarket A Pea in the Pod Collection.
The value-priced Motherhood Maternity merchandise brand and stores will not be affected by the changes.
After the restructuring, the company will still have 761 stand-alone stores. It also distributes its Oh Baby by Motherhood collection through a licensed arrangement at Kohl's stores in the US.
Rebecca Matthias, president and chief creative officer, said: "We are simplifying our business model, cutting overhead costs and streamlining our merchandise assortments to drive the best possible results both during this difficult economic period and for the long term.
She added that the current multi-brand store nameplate structure is "somewhat confusing" and that streamlining the merchandise assortments across all brands will give "a more shoppable store experience."
The company has not provided details on the number of jobs being cut, but says they will account for around $0.5m of the $0.9m pre-tax expenses related to the restructuring.
In April, the retailer said it swung to a US$0.4m second quarter net loss, from a profit of $2.6m in the same period last year.
Sales for the quarter fell 3.4% to $139.0m from $143.9m last time, the company said, with same-store sales down 1.7%.
Yesterday, however, Mothers Work reiterated its full-year guidance for net sales of $562.5m to $570.0m, down 2% to 3% over fiscal 2007.
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