Form SD Destination Maternity
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
DESTINATION MATERNITY CORPORATION
(Exact name of Registrant as specified in Charter)
| Delaware | 0-21196 | 13-3045573 | ||
| (State or Other Jurisdiction of Incorporation or Organization) |
Commission File number |
(I.R.S. Employer Identification Number) |
Ronald J. Masciantonio
Executive Vice President & Chief Administrative Officer
232 Strawbridge Drive
Moorestown, NJ 08057
(856) 291-9700
(Name and telephone number, including area code, of the person to contact in connection with this report)
Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies:
| ☒ | Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2017. |
Section 1 – Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
This Form SD of Destination Maternity Corporation is filed in accordance with Rule 13p-1 under the Securities Exchange Act of 1934, as amended (“Rule 13p-1”) for the reporting period from January 1, 2017 to December 31, 2017. Rule 13p-1 requires disclosure of certain information when a company manufactures or contracts to manufacture products for which the minerals specified in Rule 13p-1 are necessary to the production or functionality of those products. The specified minerals are gold, columbite-tantalite (coltan), cassiterite and wolframite, including their derivatives, which are limited to tantalum, tin and tungsten (“Conflict Minerals”). The “Covered Countries” for the purposes of Rule 13p-1 are the Democratic Republic of the Congo, Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda and Zambia.
Destination Maternity Corporation is the world’s largest designer and retailer of maternity apparel. As of October 28, 2017, Destination Maternity operates 1,147 retail locations in the United States, Canada and Puerto Rico, including 501 stores, predominantly under the trade names Motherhood Maternity®, A Pea in the Pod® and Destination Maternity®, and 646 leased department locations. The Company also sells merchandise on the web primarily through its brand-specific websites, motherhood.com and apeainthepod.com, as well as through its destinationmaternity.com website. Destination Maternity has international store franchise and product supply relationships in the Middle East, South Korea, Mexico and Israel. As of October 28, 2017, Destination Maternity has 208 international franchised locations, including 16 standalone stores operated under one of the Company’s nameplates and 192 shop-in-shop locations. Throughout this report, “Destination Maternity”, “DMC”, “we”, “us” or “our” means Destination Maternity Corporation and its consolidated subsidiaries and their predecessors.
We design and contract for the production of over 90% of the products we sell using factories located throughout the world, predominantly outside of the United States. A majority of our products are purchased as finished product made to our design specifications (“Company Branded Products”). We sometimes arrange for the purchase of certain components of Company Branded Products, which we refer to as “Trim,” which are then included on such final finished product. “Trim” includes, without limitation, the following types of products: buttons, zippers, underwire for bras, hooks and eyes, snaps, rivets, buckles and flat hooks. We purchase such Trim from the inventory made available by our suppliers.
As part of our preparation of this report, we conducted a review of all Company Branded Products manufactured in 2017 to determine which, if any, of those products may contain Conflict Minerals. We concluded that, as a retail apparel company, the only component of our products that could potentially contain Conflict Minerals would be Trim. As part of our Conflict Minerals Compliance Program, we requested our Trim vendors provide information concerning Conflict Minerals contained in their products. The Company received responses from 84% of its vendors.
Item 1.02 Exhibit
Exhibit 1.01 is hereby incorporated into this Item 1.02 by reference.
Section 2 – Exhibits
Item 2.01 Exhibits
| Exhibit No. | Description | |
| 1.01 | Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form SD. | |
SIGNATURES
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 duly authorized undersigned.
| DESTINATION MATERNITY CORPORATION | ||||||
| Date: May 31, 2018 | By: | /s/ David Stern | ||||
| David Stern Executive Vice President & Chief Financial Officer | ||||||
Exhibit 1.01
DESTINATION MATERNITY CORPORATION
Conflict Minerals Report
for the year ended December 31, 2017
This is the Conflict Minerals Report (“CMR”) of Destination Maternity Corporation (“Destination Maternity”, “DMC”, “we”, “us” or “our”) for the year ended December 31, 2017, presented to comply with Rule 13p-1 (“Rule 13p-1”) under the Securities Exchange Act of 1934 ( the “1934 Act”).
Background
Rule 13p-1 was adopted by the Securities and Exchange Commission (“SEC”) to implement reporting and disclosure requirements related to Conflict Minerals as directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”). Rule 13p-1 imposes certain reporting obligations on SEC registrants whose manufactured products contain Conflict Minerals that are intentionally added and that are necessary to the functionality or production of their products. Conflict Minerals are defined as cassiterite, columbite-tantalite, gold, wolframite, and their derivatives, which are limited to tin, tantalum, tungsten, and gold for the purposes of Rule 13p-1. The “Covered Countries” for the purposes of Rule 13p-1 are the Democratic Republic of the Congo, Angola, Burundi, Central African Republic, the Republic of the Congo, Rwanda, South Sudan, Tanzania, Uganda and Zambia.
Company Overview
Destination Maternity Corporation is the world’s largest designer and retailer of maternity apparel. As of October 28, 2017, Destination Maternity operates 1,147 retail locations in the United States, Canada and Puerto Rico, including 501 stores, predominantly under the trade names Motherhood Maternity®, A Pea in the Pod® and Destination Maternity®, and 646 leased department locations. The Company also sells merchandise on the web primarily through its brand-specific websites, motherhood.com and apeainthepod.com, as well as through its destinationmaternity.com website. Destination Maternity has international store franchise and product supply relationships in the Middle East, South Korea, Mexico and Israel. As of October 28, 2017, Destination Maternity has 208 international franchised locations, including 16 standalone stores operated under one of the Company’s nameplates and 192 shop-in-shop locations.
We design and contract for the production of over 90% of the products we sell using factories located throughout the world, predominantly outside of the United States. A majority of our products are purchased as finished product made to our design specifications (“Company Branded Products”). We sometimes arrange for the purchase of certain components of Company Branded Products, which we refer to as “Trim,” which are then included on such final finished product. “Trim” includes, without limitation, the following types of products: buttons, zippers, underwire for bras, hooks and eyes, snaps, rivets, buckles and flat hooks. We purchase such Trim from the inventory made available by our suppliers.
As part of our preparation of this report, we conducted a review of all Company Branded Products manufactured in 2017 to determine which, if any, of those products may contain Conflict Minerals. We concluded that, as a retail apparel company, the only component of our products that could potentially contain Conflict Minerals would be Trim.
Conflict Minerals Compliance Program
In order to comply with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Section 1502”) and Rule 13p-1 under the 1934 Act, we have implemented a comprehensive Conflict Minerals compliance program. Our Conflict Minerals compliance program was developed in accordance with industry standard practices, including, without limitation, the guidelines suggested by the American Apparel & Footwear Association (per their publication titled “Conflict Minerals Guidance 2.0 dated May 28, 2013”). Our compliance program consists of a Conflict Minerals Policy, Conflict Minerals Manual, vendor certification and information sharing requirements, and Conflict Minerals terms in our Purchase Order Terms and Conditions.
Conflict Minerals Policy
As part of our program, we have adopted the Conflict Minerals Policy (the “Policy”) set forth below, which applies to all of our product suppliers. The Policy also is posted on our website at: http://www.destinationmaternitycorp.com/SupplyChainCompliance.asp.
CONFLICT MINERALS
Gold, columbite-tantalite, cassiterite, and wolframite (and their respective metal derivatives, Gold, Tantalum, Tin, and Tungsten) (referred to here as “G+3T minerals”) are sometimes used in consumer products. The Democratic Republic of Congo (DRC) and its surrounding areas have vast reserves of these G+3T minerals. Unfortunately, many of the G+3T minerals from this region of the world are illegally sourced and traded by armed groups who are responsible for various human rights violations throughout that region. Accordingly, these G+3T minerals, when sourced from the DRC and surrounding areas, have become commonly known as “conflict minerals.”
Destination Maternity Corporation (“Destination Maternity”) does not condone the use of conflict minerals that fuel human rights violations in the products we sell. We at Destination Maternity are committed to avoiding the inclusion of conflict minerals as functionally necessary parts of our products where such conflict minerals and derivatives originate from the DRC and surrounding areas. To that end, effective on January 1, 2013, we require that each of our suppliers who provide us with products which include, or may include, any G+3T minerals or
derivatives ensure that there are no conflict minerals sourced from the DRC or surrounding areas and identify and verify that their sources of G+3T minerals or derivatives incorporated into products sold to Destination Maternity are conflict free. Our suppliers must certify to us that any such G+3T minerals or derivatives used by them (where they are necessary to the functionality or the production of the subject product) either do not originate from the DRC or surrounding areas, or come from recycled or scrap sources. We may also require that our suppliers implement other reasonable actions as may be appropriate to ensure that conflict minerals that may be used in products supplied to Destination Maternity do not originate from the DRC and surrounding areas. In addition, this “conflict mineral free” requirement is reiterated to each of our suppliers on our standard purchase order terms and conditions which are part of every order submitted to our suppliers. Please see our vendor website at http://wwot.destcorp.com for a copy of the above referenced certification and our standard purchase order terms and conditions.
Conflict Minerals Manual
DMC developed a Conflict Minerals Manual to educate our suppliers about the Conflict Minerals rule, our Conflict Minerals Policy and the reporting obligations. We generally are at the top of our supply chain and are many steps removed from raw materials suppliers. Thus, the Conflict Minerals Manual we developed provides specific steps vendors should undertake to map the use of Conflict Minerals, if any, in their supply chains and we request they provide such information to us. Our Conflict Minerals Manual is available on our vendor website at: http://wwot.destcorp.com/documents/Conflict_Minerals_Manual.pdf.
Vendor Certification and On-going Information Sharing Requirements
We also require all Trim suppliers to sign a certification which acknowledges their commitment to comply with our Conflict Minerals Policy. In addition, we request that Trim suppliers complete a due diligence survey using the CFSI Conflict Minerals Reporting Template (“CMRT”), which requires the supplier to indicate whether any of the products it supplies contain Conflict Minerals and includes a reasonable country of origin inquiry relating to any such Conflict Minerals, in a manner consistent with the Guidelines of the Organization for Economic Cooperation & Development for Responsible Supply Chains of Minerals from High Conflict Areas (the “RCOI Survey”).
Purchase Order Terms and Conditions
The following language is also included in our purchase order terms and conditions used for all orders from all of our product suppliers:
In addition, Vendor represents and warrants that it shall not utilize, nor allow any other third party to utilize, any so called “Conflict Minerals” (such as gold, columbite-tantalite, cassiterite, and wolframite (and their respective metal derivatives, Gold, Tantalum, Tin, and Tungsten)), as defined in Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (as amended from time to time and including rules and regulations thereunder, “Dodd-Frank”), which are sourced from “Covered Countries” (such as, without limitation, the Democratic Republic of Congo, Angola, Burundi, the Central African Republic, The Republic of Congo, Uganda, Rwanda, Sudan (South Sudan), Tanzania and Zambia, also as defined in Dodd-Frank) in any goods or components of goods, or in the production of such goods or components of goods, manufactured or produced by Vendor for Buyer under the Purchase Order or otherwise.
Reasonable Country of Origin Inquiry for 2017
As of the date of this report, we have received completed CMRTs from approximately 84% of our Trim suppliers. The supplier responses were evaluated for consistency, plausibility, and gaps in information. In addition, nearly all of our Trim suppliers have signed our Conflict Minerals Certification. Some of our suppliers indicated that their products contained one or more Conflict Minerals that may be necessary to the functionality or production of the products they supply to us. Of the suppliers that indicated the use of Conflict Minerals, all of them indicated they had obtained smelter information for the applicable metal. Based on the information provided by the vendors, the Company determined that no additional inquiry was necessary. We have escalated the RCOI Survey process with those suppliers that did not provide information.
Conclusion
Destination Maternity Corporation continues to evaluate the presence of Conflict Minerals in its supply chain. We also continue to work closely with our vendors to require them to provide country of origin and smelter information regarding any Conflict Minerals that may be in their Trim pieces incorporated into the Company Branded Products.