FINANCE

Kroger in deal to sell some former Toys ‘R’ Us brands

BY Marianne Wilson

Kroger is the latest retailer to jump into toys for the holiday season, but it’s doing so via a partnership with the hedge fund owners of brands that were exclusive to Toys “R” Us.

The nation’s largest supermarket retailer will sell Geoffrey’s Toy Box exclusive brands in nearly 600 stores across its portfolio for the 2018 holiday season. Geoffrey’s Toy Box is a division of Geoffrey LLC, which owns and operates a portfolio of more than 20 exclusive brands that were previously exclusive to the now defunct Toys “R” Us.

Starting this month, Geoffrey’s Toy Box branded toys and displays will appear in select stores operated by Kroger, with a curated selection of 35 items, ranging in price from $19.99 to $49.99. The holiday program will feature exclusive toys from such brands as Imaginarium, Edu Science, and Just Like Home. The product assortment will vary by location.

“Geoffrey’s Toy Box delivers a unique shopping destination within Kroger stores,” said Robert Clark, Kroger’s VP president of merchandising. “We’re excited to offer Geoffrey’s Toy Box this holiday season to provide our customers with the opportunity to purchase a selection of toys once exclusive to Toys “R” Us.”

With the shuttering of Toys “R” Us, an array of retailers, ranging from J.C. Penney Co. and Target to Party City and Five Below, have expanded their toy selection as the holidays approach.

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Canada Goose expands into footwear via acquisition

BY Marianne Wilson

Canada Goose Holdings is spreading its wings.

The high-flying premium outerwear company has made its first foray into footwear, acquiring Baffin, a Canadian designer and manufacturer of performance outdoor and industrial footwear. The transaction was put at C$$32.5 ($24.8 million).

As a wholly owned subsidiary of Canada Goose, Baffin will continue to operate on a stand-alone basis out of its headquarters in Stoney Creek, Ontario. Baffin specializes technically advanced, high quality products for adventure and work. The company predominantly sells its products through distributors and retailers in Canada and the United States.

“I have known and admired Baffin president Paul Hubner for years, and watched as he has developed innovative new designs and built a thriving business that is known for making the best and warmest boots,” said Dani Reiss, president & CEO, Canada Goose, Toronto. “The Arctic heritage and best-in-class functionality of Baffin boots are synonymous with what Canada Goose stands for. As we continue to execute our current growth initiatives and build an enduring brand for generations to come, Baffin provides us with valuable infrastructure and know-how to start exploring the exciting global footwear category.”

Founded in 1957, Canada Goose went direct to consumers in 2014 with an e-commerce site. It opened its first freestanding stores in 2016, and currently operates a total of locations in seven cities. It sells online in 12 countries, and in goods are also sold through select department stores and specialty stores.

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Destination Maternity reducing headcount as part of restructuring

BY Marianne Wilson

Destination Maternity Corp. is streamlining its product and sourcing teams as it strives to become a “leaner and more nimble” organization.

The move is part of the maternity apparel retailer’s efforts to reduce costs following “ongoing rationalization” of its overall product mix and improvements in inventory efficiency. It is expected to yield net cost savings of approximately $1.2 million to $1.4 million in fiscal year 2019.

Destination Maternity expects the restructuring, which includes headcount reductions in its product and sourcing divisions, to result in a one-time severance charge of approximately $0.5 million during the third quarter of 2018.

“Recognizing the need to focus our product assortment, rationalize costs and improve inventory efficiency, we completed an in-depth review of our product offer, overall inventory levels and distribution channels,” said CEO Marla Ryan. “Through this effort, we identified profitable solutions to improve our product mix and reduce inventory as we begin 2019. We also made the difficult decision to reduce headcount in our product and sourcing divisions to better rationalize resources and costs across the organization.

The restructuring is part of the initial stages of Destination Maternity’s previously announced plan to improve its long-term growth and profitability.

“While these actions are never easy, the changes we are implementing will enable us to become a leaner and more nimble organization,” said Ryan. They will also allow us to reallocate more of our resources on becoming a digital flagship serving the needs of today’s millennial moms and moms2be.”

As of August 4, 2018, Destination Maternity operates 1,114 retail locations in the United States, Canada and Puerto Rico, including 480 stores, predominantly under the trade names Motherhood Maternity, A Pea in the Pod and Destination Maternity, and 634 leased department locations.

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