Not So Blessed Event

A Pea in the Pod, a high-fashion maternity-wear chain, hasn't exactly delivered since its September initial public offering of stock. Four months after the IPO--at $12 per share--the stock has lost almost half its value (chart). The woes of the Irving (Tex.)-based retailer illustrate the vagaries of the apparel industry and the influence of a strong rival, Mothers Work.

Pea boasts good clothes and a solid balance sheet, but a slowdown in the maternity market has hurt. Since spring, fashion has let women wear looser-fitting garments, which they can buy anywhere. This zapped Mothers Work stock just as Pea went public, dragging down Pea, too.

But since then, the stock of Mothers Work (104 stores) has rebounded, while Pea (55) still lags. Why? Pea reported a 43% profit drop in its most recent quarter, compared with a 28% gain for Mothers Work, which has the advantage of being able to make its own clothes, keeping inventory fresh.

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