Upscale Maternity Clothing Store Goes Tummy-to-Tummy With Rival

THERE'S nothing motherly about the marketing strategies of Mothers Work Inc., an upscale maternity clothing manufacturer and retailer.

The Philadelphia-based company is going head-to-head (or tummy-to-tummy) with chief rival A Pea in the Pod Inc., based in Irving, Texas, by locating new stores near its competition's outlets.

``[We] can show consumers that we have better value on our offerings,'' says Tom Frank, Mothers Work's vice president of finance.

The strategy seems to be working. Last month, Mark Schreiber, A Pea in the Pod's chairman and CEO, announced in a press release that the company will close some ``underperforming'' stores. He did not specify why.

These are the only two upscale maternity clothing retailing chains in the nation, says Terence McEboy of Janney and Montgomery Scott Inc., a New York brokerage firm. And they have been ``competing seriously for the last six months,'' he says.

For example, A Pea in the Pod cut its prices on basics, such as T-shirts and leggings. Mothers Work countered, reducing prices, Mr. McEboy says.

Maternity clothing chains are expanding mainly because the market is underserved, McEboy says. There are 4 million babies born every year in the United States, many to the women who comprise 45 percent of the work force. This has increased demand for career-oriented and fashionable maternity wear. At the same time, department stores, which used to sell maternity clothing, have discontinued their lines because they were not profitable and were difficult to maintain a variety of styles, he says.

``Customers are looking for the alternative,'' says McEboy, adding that the two companies are the first maternity clothing retailers to operate large-scale.

``It's easier to shop at a store where all the clothing is maternity,'' said Diane Lawrence, a customer at Boston's Mimi Maternity, a Mothers Work chain. Picking out a red dress for a wedding party, Ms. Lawrence contends that she has as much choice as she would at Ann Taylor or Banana Republic.

Today, Mothers Work boasts 175 stores, 78 more than last year. Sales hit $59 million this year, almost double last year. And same-store growth increased 2.8 percent over last year.

The retailer will enjoy future growth, says Tom Thomson, an analyst at Wheat First Butcher Singer, a Richmond, Va.-based brokerage firm. He says he expects the company to open another 45 stores this year. (In January, Mothers Work acquired competitor Page Boy Company Inc., which helped the firm ``consolidate,'' Mr. Frank says.)

Besides quality and merchandising strategies, Thomson says Mothers Work's efficient delivery of items is another key to growth.

A Pea in the Pod now maintains 68 stores nationwide. The chain posted $11.8 million in total sales for the third quarter, a 10.5 percent increase over last year. However, same-store sales for the quarter fell by 8.6 percent.

Prior to the real-estate expansion of 1990, Mothers Work carried out a two-stores-in-one-mall strategy. The company divided into two categories: Mothers Work, for career and casual wear, and Mimi Maternity, for fancy and more expensive dresses.

The company opened the two stores in the same shopping mall to ``keep away other competitors,'' Frank says. If a mall has two types of maternity clothing stores, mall operators are less likely to need another, he says.

Last year, Mothers Work opened Maternity Works in many resort destinations. Its merchandise is about 30 percent cheaper than other Mothers Work stores; it is now the firm's fastest-growing segment.

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