Destination Maternity Expands International Reach With South Korean Franchise

PHILADELPHIA, June 29, 2011 /PRNewswire/ -- Destination Maternity Corporation (Nasdaq: DEST), the world's leading maternity apparel retailer, today announced its planned expansion into South Korea through an international franchise agreement with Agabang & Company, one of the leading retailers in South Korea.  Through this franchise relationship, Destination Maternity will introduce its Motherhood Maternity®, A Pea in the Pod®, and Destination Maternity® brands into South Korea, with the first franchise location expected to open in late Summer or early Fall 2011.  Destination Maternity brands will initially be sold through freestanding Destination Maternity stores and shop-in-shops in select Agabang Gallery®, Baby House®, and Nextmom® branded stores.  

In South Korea, as of May 31, 2011, Agabang & Company has 40 Agabang owned and operated freestanding stores under the Agabang Gallery, Baby House, and Nextmom brands, 365 franchised freestanding locations under the Agabang®, Ettoi®, Dear Baby®, Elle® and 2ya2aO® brands, and 393 owned or franchised shop-in-shops under its owned or licensed brands in retail stores such as Lotte®, Shinsegae®, Hyundai® and E-Mart®.

Under the multi-year franchise agreement for South Korea, Destination Maternity has granted to Agabang & Company the exclusive rights to operate branded retail locations and market merchandise under the Company's Motherhood Maternity, A Pea in the Pod, and Destination Maternity brands in South Korea.  Agabang & Company will exclusively purchase maternity and nursing apparel merchandise from Destination Maternity or suppliers designated by Destination Maternity.  Additional terms of the agreement were not disclosed.

Ed Krell, Chief Executive Officer of Destination Maternity, commented, "We are very excited to announce our expansion into South Korea.  Our partnership with South Korean retail market leader Agabang & Company allows us to bring our extensive retail experience and knowledge as the maternity fashion experts to a key international market.  South Korean moms-to-be are looking for high-quality, fashionable maternity apparel at a variety of price points, and we are thrilled to provide an assortment that serves that need.  The introduction of our Motherhood Maternity, A Pea in the Pod, and Destination Maternity brands to South Korea is the continuation of an international expansion effort that has strengthened our position as the world's leading maternity apparel retailer."

Bon K. Koo, Chief Executive Officer of Agabang & Company, said, "We are very pleased to partner with Destination Maternity in introducing the world's leading maternity apparel brands, Motherhood Maternity, A Pea in the Pod, and Destination Maternity, to our customers.  We believe Destination Maternity's extensive experience, combined with Agabang & Company's retail presence and reputation will provide the ideal platform for growing a strong maternity and nursing apparel business in South Korea."

This franchise relationship with Agabang is the third such relationship entered into by Destination Maternity since 2008.  In October 2008 Destination Maternity announced the signing of its first international franchise agreement to introduce its brands into six key markets in the Middle East.  In 2009, the Company signed its second international franchise agreement to introduce its brands into India.  Currently, Destination Maternity has 57 international franchised locations in the Middle East and India, including 45 shop-in-shop locations and 12 Destination Maternity branded stores.  

About Destination Maternity Corporation

Destination Maternity Corporation is the world's largest designer and retailer of maternity apparel.  In the United States and Canada, as of May 31, 2011, Destination Maternity operates 2,361 retail locations, including 663 stores, predominantly under the tradenames Motherhood Maternity®, A Pea in the Pod®, and Destination Maternity®, and sells on the web through its DestinationMaternity.com and brand-specific websites.  Destination Maternity also distributes its Oh Baby by Motherhood® collection through a licensed arrangement at Kohl's® stores throughout the United States and on Kohls.com.  In addition, Destination Maternity is expanding internationally and has exclusive store franchise and product supply relationships in India, the Middle East, and South Korea.

About Agabang & Company

In 1979 Agabang & Company launched the first professional company in South Korea specializing in baby clothing and gear and is now the leading retailer of baby apparel and accessories in South Korea.  In South Korea, as of May 31, 2011, Agabang has 40 Agabang owned and operated freestanding stores under the Agabang Gallery®, Baby House®, and Nextmom® brands, 365 franchised freestanding locations under the Agabang®, Ettoi®, Dear Baby®, Elle® and 2ya2aO® brands, and 393 owned or franchised shop-in-shops under its owned or licensed brands in retail stores such as Lotte®, Shinsegae®, Hyundai® and E-Mart®.  Agabang also sells on the web through www.aganet.co.kr.  In addition, as of May 31, 2011, Agabang & Company operates 54 franchised freestanding stores in China under the Agabang brand and 79 shop-in-shops within major department stores in China such as Parkson®, Isetan® and Jeonhwa®.

Destination Maternity Corporation (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, including those regarding international expansion and various business initiatives, 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 to differ materially from those expressed or implied in any such forward-looking statements: the continuation of the economic recovery of the retail industry in general and of apparel purchases in particular, our ability to successfully manage our various business initiatives, the success of our international business and its expansion, our ability to successfully manage and retain our leased department and licensed relationships and marketing partnerships, future sales trends in our existing store base and through the Internet, unusual weather patterns, changes in consumer spending patterns, raw material price increases, overall economic conditions and other factors affecting consumer confidence, demographics, and other macroeconomic factors that may impact the level of spending for maternity apparel,  expense savings initiatives, our ability to anticipate and respond to fashion trends and consumer preferences, unanticipated fluctuations in our operating results, the impact of competition and fluctuations in the price, availability, and quality of raw materials and contracted products, availability of suitable store locations, continued availability of capital and financing, our ability to hire and develop senior management and sales associates, our ability to develop and source merchandise, our ability to receive production from foreign sources on a timely basis, potential stock repurchases, potential debt prepayments, the continuation of the regular quarterly cash dividend, the trading liquidity of our common stock, changes in market interest rates, war or acts of terrorism, and other factors set forth in the Company's periodic filings with the Securities and Exchange Commission, or in materials incorporated therein by reference.

SOURCE Destination Maternity Corporation