DESTINATION MATERNITY CORPORATION (NASDAQ:DEST) Files An 8-K Costs Associated with Exit or Disposal Activities
On June 20, 2019, Destination Maternity Corporation (the Company) committed itself to the implementation of a reduction in force to position the Company as a more efficient and profitable organization. The Company plans to focus on a key item driven assortment, with more emphasis on evergreen product and streamlining its product pipeline teams. This reduction in force was announced in a press release issued by the Company and furnished in the Companys Current Report on Form 8-K dated June 24, 2019. The reduction in force was completed on June 25, 2019.
The Company expects to realize cost savings of $4.0 million – $4.5 million on an annualized run-rate basis from these actions. Customary transition assistance will be provided to affected employees. The reduction in force will result in a one-time severance charge of approximately $1.3 million – $1.5 million during the second quarter of 2019, with severance benefits paid out ratably in cash.
This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions that such forward-looking statements contained in this Form 8-K or made from time to time by management of the Company, including those regarding management changes and various business initiatives, involve risks and uncertainties, and are subject to change based on various important factors. The following factors, among others, could affect the Companys ability to realize such savings and could cause actual results to differ materially from those expressed or implied in any such forward-looking statements: the strength or weakness of the retail industry in general and of apparel purchases in particular, our ability to successfully manage our various business initiatives, our ability to successfully manage our real estate relationships, overall economic conditions and other factors affecting consumer confidence, demographics and other macroeconomic factors that may impact the level of spending for apparel (such as fluctuations in pregnancy rates and birth rates), availability of suitable store locations, our ability to develop and source merchandise and other factors set forth in the Companys periodic filings with the U.S. Securities and Exchange Commission, or in materials incorporated therein by reference. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this release are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of this Form 8-K. The Company assumes no obligation to update or revise the information contained in this release (whether as a result of new information, future events or otherwise), except as required by applicable law.