Charming Shoppes Inc. said recently that it will discontinue the Lane Bryant Woman catalog by the end of the first quarter of fiscal year 2010 so that it can focus on its core retail brands: Lane Bryant, Fashion Bug and Catherines. In addition, the company will close as many as 100 stores, in addition to the 150 store closings announced earlier this year.
The company also announced the commencement of a restructuring plan, expected to result in total cost savings of $100 million to $125 million, with approximately $75 million occurring in fiscal year 2010, and a significant plan for the transformation of its merchandise strategy. These moves are part of a strategy to transform Charming Shoppes into a vertical specialty store model. With the assistance of global management consulting firm Kurt Salmon Associates, Charming Shoppes aims to significantly increase the percentage of internally designed, developed and sourced fashion product, with the goal of becoming more focused on fashion.
“The transformation of our merchandising processes and the attainment of significant cost savings through our restructuring plan will position us for significantly improved operating performance for the future,” said Alan Rosskamm, chairman of the board and interim CEO of Charming Shoppes, in a statement.
The company estimates that exiting the Lane Bryant Woman catalog business will allow for considerable cost savings. The company estimates losses from the operation of this catalog of approximately $10 million during the current fiscal year.
In September, Charming Shoppes completed the sale of its non-core misses apparel catalogs, known as Crosstown Traders, to Orchard Brands, a portfolio company of Golden Gate Capital, for a purchase price of $35 million in cash. The deal with Charming Shoppes includes the catalog titles and associated e-commerce sites for Old Pueblo Traders, Bedford Fair, Willow Ridge, Lew Magram, Brownstone Studio, Intimate Appeal, Monterey Bay Clothing Co. and Coward Shoe.
The company also is exploring a sale of its Figi’s catalog business.
In the same statement, Charming Shoppes reported a loss from continuing operations of $57.8 million, or a loss of $0.50 per diluted share for the 13 weeks ended November 1.
Net sales for the company’s retail stores segment were $528.5 million during the same period, a decrease of 10%. Comparable store sales decreased 9%.