As they discussed in our July 26 press release, they saw an increasingly severe clearance environment for spring maternity apparel during the latter half of June and especially in July, with this clearance environment being more severe than they had previously anticipated. Consistent with our previously stated target for fourth quarter comparable store sales of between down 1 percent and up 1 percent, they expect their comparable store sales to increase modestly for August and September, as Fall product becomes a more important driver of sales and they face weaker last year sales comparisons.
This would result in continued improvement from their comparable store sales decreases of 1.9 percent for the third quarter this year, 3.0 percent for the second quarter this year, 4.2 percent for the first quarter this year, and 8.3 percent for the fourth quarter of last year. Looking ahead, they are pleased with their Fall product lines and continue to be very excited about our new strategic business initiatives, including their Kohl's and Sears initiatives and their multi-brand store initiatives, to promote their long-term growth in sales and profitability, while addressing the strong continued competitive pressures in the maternity apparel business."
Mothers Work is the leading designer, manufacturer, and marketer of maternity fashion in the US, as of July 31, 2005, Mothers Work operates 1,593 maternity locations, including 856 stores, predominantly under the tradenames Motherhood Maternity, A Pea in the Pod, Mimi Maternity, and Destination Maternity, and 737 leased departments, and sells on the web through its DestinationMaternity.com, maternitymall.com and brand-specific websites.
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