News

iMaternity stores sold to rival company

February 21, 2002

CHICAGO - An experiment to retool maternity fashion retailer Dan Howard Industries Inc. from a traditional retail outlet to a high-tech center -- iMaternity -- where merchandise could be ordered using Web kiosks, has ended. The Chicago-based company has been sold to rival clothing firm Mothers Work Inc. for $19.5 million in stock and about $13 million in debt payments.

Mothers Work plans to convert most of the Dan Howard stores into members of its Motherhood chain, which features clothing at moderate prices.

"As more of a fashion brand, iMaternity achieved great success in more upscale markets," Mothers Work Chief Financial Officer Michael F. Devine III told ChicagoBusiness.com. "But it wasn't doing so well in the more traditional (middle-income) markets."

Dan Howard chief executive officer James Kirsch began converting Dan Howard's chain of about 170 stores into iMaternity outlets about three years ago. The kiosks offered at those stores allowed customers to order a wide range of items, including activewear, formal wear, and lingerie, according to the Chicago Sun-Times.

Kirsch told ChicagoBusiness.com that the privately held company decided to sell rather than face the long-term pressure of borrowing in order to finish retooling its stores. The company had opened 11 retooled iMaternity stores and had plans to expand to 250 stores.

"The Internet gave us the ability to create excitement. It also allowed us to bring in investors and do a deal that we probably would not have been able to do otherwise," Kirsch said. "The Internet didn't ruin the business. Nothing ruined the business. It's not like the home run you dream of, but we got out at a decent price."