MOTHERS WORK TO BUY IMATERNITY
Byline: Evan Clark
NEW YORK — Mothers Work Inc. is never done — as demonstrated Tuesday when the firm laid out plans to acquire competitor iMaternity from the Kirsch family and other investors.
Expected to close this week, the acquisition of iMaternity will exact a price of $19.5 million in preferred stock and the option to purchase 350,000 shares of Mothers Work’s common stock for $22.50 a share. Customary closing conditions also apply.
Shares of the firm dropped 36 cents Tuesday, to close at $8.50 on the Nasdaq.
IMaternity brings with it 170 maternity stores under the names of Dan Howard and Mothertime, representing approximately 200,000 square feet, and the iMaternity Web property. The retail locations will be gradually converted into Mothers Work’s existing nameplates of Motherhood Maternity, A Pea in the Pod and Mimi Maternity.
The acquisition is expected to add $40 million to $45 million in revenues and an increase in operating earnings in the first year. In fiscal 2000, ended Sept. 30, 2000, Mothers Work reported sales of $366.3 million.
Chief financial officer Michael Devine told WWD that the firm will close Maternity’s Chicago headquarters and a Costa Rican production facility, but noted more details on the deal would be released in a conference call scheduled for today.
“Part of the financial pop [of the acquisition] comes in closing these corporate and production facilities and closing some stores in geographic regions where we already have a presence,” he said.
Devine noted that the prospects of a difficult year ahead for retailing and a “motivated seller,” who took over the family business when the former generation retired, helped bring about the deal.
On Tuesday, the firm also threw a grand-opening party for its new A Pea in the Pod flagship, a 3,300-square-foot store at 860 Madison Avenue, at 70th Street, which opened Sept. 29.