SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 21, 1998
MOTHERS WORK, INC.
(Exact name of issuer as specified in charter)
DELAWARE 0-21196 13-3045573
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or Organization) file number Identification Number)
456 North 5th Street
Philadelphia, PA 19123
(Address of principal executive offices)
(215) 873-2200
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On September 21, 1998 Mothers Work, Inc. (the "Company") announced that
it will sell or close the remaining stores in its Episode(R) non-maternity
bridge women's apparel business to eliminate the losses from that business. The
Company has signed a definitive agreement to sell 24 of the 30 remaining Episode
locations to The Wet Seal, Inc. for $2.8 million. The sale, subject to customary
closing conditions including the receipt of required landlord consents and other
third party approval, is expected to close on December 1, 1998. The Company will
close the remaining 6 locations by December 31, 1998. Assuming that the
transaction with The Wet Seal, Inc. is completed as planned, the Company expects
to record a nonrecurring charge of $13.5 million in the fourth fiscal quarter
for costs associated with the sale or closing of the Episode stores. The cash
portion of the charge (approximately $5.1 million) is expected to be paid out
through the first quarter of fiscal 1999. The Company expects to receive cash of
approximately $7.5 million from the sale of Episode related inventory through
October 1998. The Company expects to report a substantial operating loss for the
fourth quarter and the fiscal year ended September 30, 1998 largely attributable
to the Episode division.
The Wet Seal, Inc. is a specialty retailer currently operating 418
stores in 42 states and Puerto Rico.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Press release dated September 21, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MOTHERS WORK, INC.
Date: September 23, 1998 By: /s/ Thomas Frank
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Thomas Frank, Chief
Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release dated September 21, 1998.
Exhibit 99.1
PRESS RELEASE
(For Further Information Contact: Tom Frank,
Chief Financial Officer (215) 873-2200)
MOTHERS WORK, INC. ANNOUNCES CLOSURE OF REMAINING
EPISODE DIVISION STORES AND RELATED NONRECURRING CHARGES
PHILADELPHIA, PA, September 21 -- Mothers Work, Inc. (Nasdaq: MWRK)
today announced that it will sell or close the remaining stores in its
Episode(R) non-maternity bridge women's apparel business to eliminate the losses
from that business. The Company has signed a definitive agreement to sell 24 of
the 30 remaining Episode locations to The Wet Seal, Inc. (Nasdaq: WTSLA) for
$2.8 million. The sale, expected to close December 1, 1998, is subject to
customary closing conditions including receipt of required landlord consents and
other third party approval. The Company will close the remaining 6 locations by
December 31, 1998. Assuming the transaction with The Wet Seal, Inc. is completed
as planned, the Company expects to record a nonrecurring charge of $13.5 million
in the fourth fiscal quarter for costs associated with the sale or closing of
these stores. The cash portion of the charge, approximately $5.1 million, is
expected to be paid out through the first quarter of fiscal 1999. The Company
expects to receive cash of approximately $7.5 million from the sale of Episode
related inventory through October 1998. The Company expects to report a
substantial operating loss for the fourth quarter and the fiscal year ended
September 30, 1998, largely attributable to the Episode division.
The Wet Seal, Inc. is a specialty retailer currently operating 418
stores in 42 states and Puerto Rico. The Wet Seal plans to convert the majority
of the stores to its Arden B concept.
Mothers Work is the Real Time Retailer(TM), using its custom
TrendTrack(TM) computer systems and quick response replenishment process to
"give the customer what she wants, when she wants it." Mothers Work operates 613
locations, including 583 maternity clothing locations and 30 Episode upscale
"bridge" women's apparel stores which will be eliminated with this action.
The Company cautions that any forward-looking statements (as such term
is defined in the Private Securities Litigation Reform Act of 1995) contained in
this press release or made from time to time by management of the Company
involve risks and uncertainties, and are subject to change based on various
important factors. The following factors, among others, in some cases have
affected and in the future could affect the Company's financial performance and
actual results and could cause actual results for fiscal 1998 and beyond to
differ materially from those expressed or implied in any such forward-looking
statements: changes in consumer spending patterns, consumer preferences and
overall economic conditions, the impact of competition and pricing, continued
availability of capital and financing, ability to develop and source
merchandise, and other factors affecting the Company's business beyond the
Company's control.
Episode America, a division of Mothers Work, Inc., is licensed to use
the EPISODE(R) trademark by Episode USA, Inc.
