Destination Maternity stores continue to improve and the firm will be adding more of these stores going forward.

- The leased department and license program are performing well and the new leased departments in Gordmans and Boscov’s has gotten off to an excellent start.
- The firm is the only national maternity specialty apparel retailer in the United States, with stores visited by 2.8 million of the 4.1 million pregnant women who give birth every year

Key questions and answers from the second quarter earnings call conducted by Mothers Work Inc. on April 24, 2007.

Mary Gilbert: Do you see additional opportunities beyond what is occurring this year in terms of new leased department opportunities with Boscov’s?

Edward Krell: We are always looking at ways to continue to grow our business, and our leased and licensed area is one that we can continue to grow.

Mary Gilbert: On the financial businesses that are being handled through third parties, are you creating a franchise with that business?

Edward Krell: Yes, the future trust is our program, but we do it as a college savings program that utilizes a MasterCard. We do not own the credit card receivable, and thus do not take on the credit card risk.

Mary Gilbert: How are you getting paid or benefitting from that?

Edward Krell: We get paid for enrolling people into the program, we get a little bit of the interchange, the credit card fees, we also have preferred merchants in the program where you can get more.

We also benefit through futuretrust.com, a whole online shopping network, that has those folks as well as 100s of on line merchants and the customer gets discounts when they shop at those folks and rebates into their 529 plans and Mothers Work also gets a revenue stream off of those purchases online through the online shopping program.

Mary Gilbert: Any comments about the performance of the multi brand and the Destination Maternity shops vis-à-vis the traditional stores?

Edward Krell: We have seen good results on the multi brand stores. Destination Maternity, which is on average 7,000 square feet and some are larger, the New York City flagship is over 10,000 square feet. We continue to look to open stores.

Joseph George (Thomas Weisel): What are your plans with respect to the leftover winter stock?

Rebecca Matthias: Where we need to take markdowns and clear, which is primarily in a fashion areas, we are actively doing that. And our winter merchandise is much lower in inventory level at the current time and that it was last year because we keep selling it.

Joseph George (Thomas Weisel): Have you taken any write-downs on the inventory in the last quarter?

Edward Krell: Yes, we always have a reserve for where we have a lower and faster market reserves. We always have a reserve related to goods that we are going to get disposed off below cost

Todd Huster (Private Investor): How is your loss entering the maternity category for fall, winter going to affect the sales projection for next quarter?

Rebecca Matthias: Its not affecting it all, right now. They have said that they are going to go online and in twenty stores starting in July.

Brian Renick (BLR Capital Partners): What are you going to do with that inventory, when you use the winter month and they are not going hit the stores?

Rebecca Matthias: It is actually part of an ongoing system that we call our replenishment system that every week in each store till its stored and it comes back to the factory based on lot’s of different factors.