Destination Maternity cutting jobs

Destination Maternity Corp. is reducing its workforce as it looks to turnaround its ailing business.

The nation’s largest maternity wear retailer  announced a reduction in force  that is expected to generate cost savings of $4.0 million, or $4.5 million on an annualized run-rate basis. The company said the reduction is part of its effort to become a more efficient and profitable organization.

The RIF announcement comes on the heels of the resignation of CEO Marla Ryan who stepped down after only 13 months at the helm. While the company searches for a new chief executive, it appointed board member Lisa Gavales to head a new unit called “Office of the Chief Executive Officer."    

“This reduction in force is a very difficult, but necessary step for the company,” said Gavales who, prior to Destination Maternity, was interim CEO of Bluestem Group Inc., and worked for three years as the chairman, CEO and president at Things Remembered. “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. While challenging, this is a critical step in helping to position the business as a more nimble and profitable organization in the future.”

Destination Maternity did not specify the number of jobs to be cut, only that it would primarily impact the company’s product pipeline teams as it continues to focus on a key item driven assortment, with more emphasis on evergreen product.

The RIF is expected to result in a one-time severance charge of approximately $1.3 million - $1.5 million during the second quarter of 2019 with severance benefits paid out ratably.

Destination Maternity reported earlier this month that same-store sales in its first quarter fell 7.2%  and e-commerce sales fell 12.5%. Net sales decreased 8.7% to $94.2 million,

As of May 4, 2019, Destination Maternity operated 998  locations, including 452 stores in the United States, Canada and Puerto Rico, and 546 leased departments located within department stores and baby specialty stores throughout the United States and Canada.