Destination Maternity Corp. on Monday announced a reduction in force that is expected to generate cost savings of $4.0 million – $4.5 million on an annualized run-rate basis. The company said the RIF will primarily impact the company’s product pipeline teams.
The reduction is part of the company’s effort to become a more efficient and profitable organization.
“This reduction in force is a very difficult, but necessary step for the company,” said Lisa Gavales, chair of the office of the chief executive officer. “We are streamlining our teams, and sharpening our product offering to focus on the key items that are most important and relevant to our new moms and moms2be. While challenging, this is a critical step in helping to position the business as a more nimble and profitable organization in the future.”
Gavales added, “We would also like to express our appreciation to each of the employees impacted by this decision for their meaningful contributions to the company. We remain committed to treating impacted associates with respect and support through this transition.”
The RIF is expected to 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. Customary transition assistance will be provided to affected employees.
Earlier this month, Destination Maternity announced Marla Ryan was out as chief executive officer but would remain with the company as president of product design, sourcing and merchandising.
At that time, the Moorestown-based company created an interim Office of the CEO to provide leadership and oversight in day-to-day operations while it looks for Ryan’s replacement. She will serve alongside board member and former Things Remembered CEO Lisa Gavales and Dave Helkey, Destination Maternity’s chief financial officer and chief operating officer.