Destination Maternity sees e-commerce sales rise 60% in Q4 2017, addresses Board controversy
Moorestown, New Jersey-based maternity apparel company Destination Maternity Corporation announced its fourth-quarter and full year 2017 results on Thursday, reporting reduced losses thanks to a rise in Q4 sales, driven by strong e-commerce operations and comps.
The company’s net sales in the 14-week fourth quarter ended February 3, 2018 totaled $105.1 million, compared to $100.2 million in the 13-week quarter ended January 28, 2017. Along with gains achieved in fiscal 2017’s 53rd week, this rise in sales was pushed by a comparable sales increase of 5.2%, in turn lifted by a strong performance in Destination Maternity’s e-commerce channel, where sales increased 60% following the relaunch of the company's four websites at the beginning of the year.
The company’s net loss in the quarter came to $10.2 million, a significant reduction compared to the loss of $32.8 million seen in Q4 2016.
Net sales over the full fiscal year 2017 fell to $406.2 million, compared with the $433.7 million achieved in fiscal 2016, a decrease that the company attributed to a slip in comparable sales (-1.5%) and the severing of its relationship with Kohl’s, as well as a net closure of 28 retail locations.
Net loss for the year reduced to $21.6 million, compared to the net loss of $32.8 million posted in 2016.
Destination Maternity’s Interim CEO Melissa Payner-Gregor said in a release that 2017 had been “a year of transition” for the company, praising the efforts of her colleagues in dealing with widespread internal changes.
Indeed, along with the end of the company’s partnership with Kohl’s, fiscal 2017 also saw the calling off of Destination Maternity’s proposed merger with French maternity and childcare group Orchestra-Prémaman – officially because of regulatory opposition in the US.
Furthermore, the company had no fewer than three different CEOs over the course of the fiscal year. In September, Anthony Romano left Destination Maternity by mutual agreement with the Board amidst falling sales, while his replacement, interim CEO Allen Weinstein stepped down for personal reasons in January 2018 and was succeeded by Payner-Gregor.
Earlier this week, following a series of fluctuations in the number of directors on its Board, the company was accused of “governance shenanigans” by investor Nathan G. Miller in a regulatory filing.
Addressing the issue in the company’s Q4 results release, Chairman of the Board Barry Erdos explained, “As announced previously, our Board has been actively considering its composition including pursuing the addition of new members to expand the skills and experience on the Board to accelerate Destination Maternity's path to profitable growth.”
“These additions show our Board's willingness to invite new opinions into the boardroom for the benefit of all stockholders, and that willingness continues,” he concluded, making reference to the appointments of Peter Longo and Pierre Mestre.
Looking forward, Payner-Gregor also outlined a dynamic strategy for Destination Maternity in the coming year. Plans focus on developing an integrated omnichannel experience, expanding the company’s distribution network and product category offerings, and improving sourcing and inventory management.
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