S&P cuts Mothers Work

Standard & Poor's said it lowered its ratings on Mothers Work Inc. The corporate credit rating was revised to B from B+. The outlook is negative.

S&P said the downgrade reflects Mothers Work's weak operating results in the fiscal year ending Sept. 30, as well as reduced earnings guidance for fiscal 2005. Standard & Poor's expects Mothers Work's operating performance to remain under pressure due to increased competition, despite incremental revenue contributions from the company's agreements with Kohl's Corp. and Sears, Roebuck & Co.

The speculative-grade ratings reflect the high business risk associated with Mothers Work's participation in the narrowly defined maternity segment of the apparel retailing industry, high debt leverage and the company's relatively small size, according to S&P.

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