Sears, Kohl's Add Mothers Work

The Two Hearts Maternity brand, created by Mothers Work, launched in selected Sears stores in April 2004 and is currently carried in 72 Sears locations. In March 2005 the brand will expand to 645 Sears stores, where it will become that retailer's exclusive maternity apparel offering.

Oh Baby! By Motherhood, a different brand created by Mothers Work, rolls into Kohl's approximately 637 stores in 40 states nationwide in February 2005. As with the Sears' deal, this brand will be exclusive to Kohl's and the only brand of maternity apparel offered in Kohl's store.

Though separate, both proprietary brands have similar descriptions as well as nearly identical retail price levels. Two Hearts Maternity is described as "a fashionable new collection including career and casual sportswear as well as dresses, lingerie, swimwear and nursing sleepwear," echoing the description of the Oh Baby! By Motherhood line as "a modern and complete assortment of sportswear, intimate apparel and sleepwear."

Of Oh Baby! By Motherhood, Rebecca Matthias, president and COO of Mothers Work, says in a statement, "this newly formed relationship introduces us to an important new-mom consumer who appreciates the convenience of shopping off-mall." Of the Sears agreement, she says, "We are delighted to be expanding our partnership . . . Sears has an outstanding reputation for selection and great prices."

Locally based Mothers Work designs maternity apparel that it sells through 1,120 retail locations that operate under four trade names: Motherhood Maternity, A Pea in the Pod, Mimi Maternity, and Destination Maternity. It also sells online at maternitymall.com and its brand-specific websites.

This third quarter, comp store sales for Mothers Work dropped 8.9% compared with third quarter a year ago. In October, Ed Tress, VP of retail, told GSR the company had been impacted by competition from the more than 1,000 retail doors that had added maternity merchandise within the past year. Kohl's was among the competitors he mentioned in addition to JC Penney, Target, Baby Gap, Fashion Bug and others. Together, the Sears and Kohl's agreements give Mothers Work 1,282 additional doors from which to compete.

At mid-day, Friday, Nov. 12, following the announcement of these two agreements, shares of Mothers Work, which trades as NWRK on the Nasdaq, rose $1.19 a share, an increase of more than 8%.