Philadelphia – Net income at Destination Maternity Corp. fell 36% to $5.5 million in the third quarter of fiscal 2014 from $8.6 million a year earlier. Expenses related to the planned relocation of Destination Maternity’s corporate headquarters and distribution facilities, as well as costs related to its proposed and withdrawn merger with Mothercare plc, drove the reduction in net income.
Destination Maternity plans to open 21 to 23 new stores during the year, including seven to eight new multi-brand Destination Maternity nameplate stores, and close approximately 51 to 54 stores, with seven to eight of these planned store closings related to openings of new Destination Maternity nameplate stores.
Net sales for the third quarter of fiscal 2014 decreased 5.5% to $134 million from $141.9 million for the third quarter of fiscal 2013. The decrease in sales for the third quarter of fiscal 2014 compared to fiscal 2013 resulted primarily from a 5.3% decrease in same-store sales and decreased sales related to the company's continued efforts to close underperforming stores.
Destination Maternity plans to relocate its corporate headquarters in late 2014 and its distribution operations in early/mid 2015 from Philadelphia, to Florence, New Jersey. The retailer expects to close on the sale of its current headquarters/distribution facility by the end of fiscal 2014, and expects to realize a gain from the sale of this facility. Destination Maternity will also incur some charges to earnings in fiscal 2014 and 2015 related to the closure of existing facilities and the preparation for occupancy of new facilities.