Destination Maternity to restructure business, reduce headcount

Destination Maternity Corporation has announced a multiyear strategic plan, Destination -> Forward, focusing on driving profitable growth and long-term shareholder value. The company anticipates the plan will help achieve FY 2022 goals of adjusted EPS of 1.20 dollars to 1.60 dollars, adjusted EBITDA of 42 million dollars to 51 million dollars, representing 20 percent annual growth and revenue of 450 million dollars to 475 million dollars with ecommerce growth of 20 percent annually. Earlier on Wednesday, the company said in a statement that it is restructuring the company’s corporate product and sourcing teams as part of its efforts to reduce costs.

“Since becoming CEO of Destination Maternity, we have conducted a rigorous assessment of the entire enterprise aimed at identifying areas to rationalize expenses, accelerate revenue growth, and improve profitability,” said Marla Ryan, CEO of Destination Maternity in a statement.

Additionally, the company expects, its Destination -> Forward plan to achieve decline in SG&A by 42 percent to 45 percent of sales, down 1000 bps from 53.8 percent in FY 2017, and generate 29 million dollars to 36 million dollars in adjusted free cash flow. The company anticipates restructuring efforts to yield net cost savings of approximately 1.2 million dollars - 1.4 million dollars in fiscal year 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. While these actions are never easy, the changes we are implementing will enable us to become a leaner and more nimble organization,” added Ryan.

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