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PHILADELPHIA-Destination Maternity, superstores that bring all three brands of Mothers Work Inc.’s maternity apparel under one umbrella, is the newest of two formats the locally based company is emphasizing as it combats increased competition. This specialty retailer targets a niche that represents just 1% of the overall population. “Mothers Work currently has a 40% share of that niche,” according to Christina de Marval, research analyst at New York-based Sidoti & Co.

She also notes that many other retailers, including Fashion Bug, Charming Shoppes, Baby Gap, Old Navy, and J.C. Penney, are targeting the maternity apparel. Nobody knows that better than Ed Tress, Mothers Work’s VP of retail, who adds Kohl’s and Target to that list. “More than 1,000 doors began carrying maternity clothing this year versus last,” he says, “and we have definitely been impacted by their entry.”

Mothers Work’s net sales for this September fell 3.5% compared with the same month a year ago, and comparable-store sales this September fell 8.9% based on 897 locations, versus a comparable-store sales decline of 4.7% over the same period last year, based on 842 locations. The “pie” doesn’t change. There are approximately four million births in the US a year, a figure that has “been pretty steady for the last 30 years,” Tress says.

The Destination Maternity format ranges from 5,000 sf to 10,000 sf and can be used freestanding or in malls, strip centers and lifestyle centers. While reducing the overhead, including rent and payroll associated with individually branded stores, these units emphasize “destination.”

In addition to carrying the full lines of Mothers Work’s Motherhood Maternity, Mimi Maternity, and A Pea in the Pod chains, Tress says, “they have a large book and magazine section devoted to pregnant women’s concerns, exercise areas with classes, gift sections, a vitamin and nutrition section, a breast feeding room, a kiddie corral for toddlers, a relaxing area with a big-screen TV for grandparents and husbands, and a learning center, where we hold classes on financial planning, yoga, and other subjects relevant to families expecting a baby. We are providing expecting mothers with a whole shopping experience.”

The first Destination Maternity opened in a strip center in Danbury, CT in March. Others are in Dallas; Huntington, Long Island; and St. Louis. Between now and spring 2005, Tress says there will be about another half-dozen and identifies Charlotte, NC. San Antonio, Boston, and White Plains, NY as other potential markets.

Typically, when a Destination Maternity opens in a market, between two to four existing, individually branded Mothers Work units are shuttered. “We take cannibalizing seriously,” Tress says. Rather than compete against one another, Destination Maternity is designed to bring shoppers of its three brands together under one roof.

The brands cater to different market levels. Motherhood Maternity, the moderate line with a jacket for $39.98, for example, targets women who shop Sears and J.C. Penney. Mimi Maternity, a middle-to-better line, targets the Talbot’s and Banana Republic shopper with jackets in the $68 to $98 range. A Pea in the Pod, where a jacket can retail for $255, is the company’s luxury line, which includes designer brands, such as Kate Spade, Anna Sui and others, exclusive to Mothers Work.

Yet Tress believes there is much crossover. “Career moms and designer shoppers go to Penney for casual clothes,” he reasons. Although the superstore format is still in the test stage, Tress says these units are generating 20% more sales volume than the regular stores, each of which carried just one of the brands in about 1,000 sf.

Mothers Work is also expanding units of a second new format that combines its Motherhood and Mimi brands in stores of between 2,500 to 3,000 sf. These are strictly retail, with none of Destination Maternity’s additional services, but full assortments of products in both brands. Depending on the location, the company is calling these stores either Motherhood or Mimi Maternity. There are now about 25 units of this format, which has been in operation for 18 months. As with Destination Maternity, the opening of a Motherhood/Mimi consolidated store calls for the closing of area stores devoted to a single brand.

The schedule of store openings and closings for 2005 is not yet finalized, Tress says, adding, “it’s fair to say it will call for larger, but fewer stores overall.” Currently, Mothers Work has 1,115 locations and is in all 50 states, plus Puerto Rico and Canada. Company-wide, Tress says sales per sf range between $350 and $600. “We can’t expect to maintain up to $600-per-sf in the larger units,” he says, “but we believe we’ll add volume per store. We’re the only retailer specifically devote to maternity, and we offer the broadest assortment and selection in this niche.”

“Strategically, this is smart,” de Marval says. “It makes sense to concentrate a few brands under one roof. The combo stores in somewhat larger square-footage bring economies to store-level expenses.” Of the superstore Destination Maternity units, de Marval adds, “there’s nobody out there offering the breadth of product and experience to that customer who spends nine months devoted to getting ready to have a baby. First-time mothers in particular are eager for information, classes, and a community experience, and first-time mothers spend the most money during those nine months.

“The maternity market is not growing. When you’re after a fixed pie and more retailers are going after the same pie, the only way to grow is to grab more market share. Strategically, Mothers Work has an edge,” de Marval says.

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