Destination Maternity taps another interim CEO

Dive Brief:

Destination Maternity on Wednesday announced the appointment of independent director Melissa Payner-Gregor as Interim Chief Executive Officer, effective immediately. She succeeds Allen Weinstein, who had been CEO since September but who decided to retire for personal reasons, also effective immediately.
In the process, the company has established an "Office of the CEO," which will include Payner-Gregor and several officers reporting to her, including Ronald J. Masciantonio, the company's executive vice president and chief administrative officer; David Stern, executive vice president and chief financial officer; and Shelley Liebsch, senior vice president of merchandising and design, according to a company press release.
The company also said that it is working with Kirk Palmer Associates in its ongoing search for a permanent CEO.

Dive Insight:

Destination Maternity, a major designer and retailer of maternity apparel, with more than 1,000 locations, has had difficulty in a turnaround it's been working on since 2014. In late summer last year, the retailer reportedly had hired consulting and advisory firm Berkeley Research Group, which a spokesperson told Retail Dive was not to "explore any in-court or out-of-court restructuring or any strategic alternatives," rather "they are focused on optimizing the expense structure.”

The turnaround plan has been an effort "to improve our business processes, key management personnel and planning resources with a focus on improving inventory management, driving sales productivity, optimizing real estate and controlling cost,” the company said in September. But slowing women's apparel sales and mall traffic, as well as trouble at department stores have made that difficult. For the first half of the fiscal year, Destination Maternity's sales fell more than 11%, to 204.7 million from $231 million in the first six months of the previous year, and the company has racked up a $3.9 million loss, compared to a $1.5 million profit in the first half of 2016.

Weinstein himself had arrived in September to replace Anthony Romano amid a c-suite shakeup, following a failed merger with French retail and design company Orchestra-Prémaman, that also had independent director Barry Erdoss replacing Arnaud Ajdler as elected board chair. The merger deal ended because of "challenges of satisfying applicable securities regulations in France and in the U.S," including the French company's absence from public stock exchanges in the U.S., Stern said in September.

"We are grateful to Allen for his service on our Board for the last seven plus years as well as his recent service as interim CEO and the progress that has been made," Erdos said in a statement Wednesday. "We are also appreciative of Melissa's willingness to lead the Company during this period of transition, and we are confident that she and our senior management team will continue our forward progress, as we look for the right chief executive to lead Destination Maternity's next phase of growth."