Mothers Work to Streamline Brands in Strategic Restructuring

Philadelphia Maternity apparel retailer Mothers Work announced Tuesday that it will streamline its brands and merchandise assortments and cut corporate jobs at its Philadelphia headquarters in a bid to become efficient and reduce expenses.

The company will expand its luxury brand, which operates stores under A Pea in the Pod banner, to include its mid-market Mimi Maternity merchandise. The retailer also will fold its Mimi Maternity merchandise into A Pea in the Pod brand, and create an upscale label called A Pea in the Pod Collection, starting with the spring 2009 line.

In addition, the company will change the name of all its Mimi Maternity stores, which operate with two different formats, beginning in January 2009. The single-brand Mimi Maternity stores (48 locations as of June 30) will be renamed A Pea in the Pod. The 44 multi-brand Mimi Maternity stores, the majority of which carry merchandise under both the Mimi Maternity and Motherhood Maturity brands, will be renamed Destination Maternity in order to better communicate to customers the multi-brand nature of these store formats.

After the restructuring, there will be 79 A Pea in the Pod stores and 62 Destination Maternity stores. The chain's 620 lower-priced Motherhood Maternity stores will not be affected. In total, the company will have a total of 761 locations after the restructuring—the same number as before.

"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,” said Mothers Work president and chief creative officer, Rebecca Matthias, in a statement.

Mothers Work expects to incur about $900,000 in restructuring—$700,000 in the fourth quarter and the rest in the first quarter of fiscal 2009.

The chain did not disclose the size of the coming job cuts.

“We recognize the need to reduce the overall cost structure of our business in order to strengthen our organization for the long term and to improve our profitability,” Matthias said. “Thus, partially as a result of the restructuring of our merchandise brands and store nameplates, but also as a result of our SKU reduction initiatives and our efforts to identify general corporate-expense savings, we have made the difficult decision to reduce our corporate staffing levels.”

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