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US mother-and-baby retailer Destination Maternity is to reduce its workforce in a move expected to generate annual cost savings of around US$4m.

While the company would not be drawn on the number of jobs that will be cut, it says the reduction is part of the company’s effort to become a more efficient and profitable organisation.

The reductions will mainly impact the company’s product pipeline teams as the retailer moves its focus to a key item-driven assortment, with more emphasis on evergreen product.

“We are streamlining our teams, and sharpening our product offering to focus on the key items that are most important and relevant to our new moms and moms2be,” says Lisa Gavales, chair of the office of the CEO. “While challenging, this is a critical step in helping to position the business as a more nimble and profitable organisation in the future.”

The board created the office of the CEO on an interim basis last month following the news Marla Ryan would step down.

Destination Maternity says the workforce reduction is expected to result in a one-time severance charge of about $1.3m-$1.5m during the second quarter of 2019.

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By GlobalData

The company recently reported a “challenging start to the year” as first-quarter net income declined to US$0.1m, and net sales fell 8.7% to $94.2m.