Plymouth-based retailer admits its decision to charge more led to poor earnings for '11.
Christopher & Banks Corp. interim CEO Joel Waller said Tuesday that the women's apparel retailer will cut base prices by 20 percent this year, essentially wiping out last year's price hike that Waller blamed for the company's poor performance.
In a conference call with investors to discuss annual and quarterly earnings, Waller said the price reduction is designed to "regain lost business."
In late 2011, Christopher & Banks, based in Plymouth, introduced new merchandise that was about 23 percent more expensive than the previous year, a decision that proved disastrous to sales. Sales at stores open for at least year, a key measure of growth for retailers, fell a steep 14 percent in the fourth quarter, including the key holiday shopping season.
Christopher & Banks stock fell 2 cents to close Tuesday at $2.36.
Overall, sales for the year fell nearly 8 percent to $412.8 million while same-store sales declined 5 percent. The retailer reported a net loss for the year of $71.1 million, or $2 a share, compared with a net loss of $22.2 million in the year-earlier period. The loss included 59 cents per share in store impairment and restructuring charges.
For the quarter ended January 28, the company reported a net loss of $31.7 million, or 89 cents a share, compared with a net loss of $16.7 million, or 47 cents a share, in the same quarter a year ago.
To save money, Christopher & Banks closed about 93 underperforming stores from November to February and laid off hundreds of employees.
Last month, CEO Larry Barenbaum abruptly resigned. The company replaced Barenbaum on an interim basis with Waller, a former Wilsons Leather CEO, whom Barenbaum had tapped for a one-year contract as president to help spark a turnaround.
Despite the bleak numbers, Waller said he saw hope in the business.
"Since joining the company, I have found that Christopher & Banks has a loyal customer, giving me confidence that we can win her back," Waller said.
In addition to lowering prices, Waller said the retailer will reduce the categories of merchandise in stores and instead increase depth in a few key product categories.
He also said Christopher & Banks will adopt a smarter approach to promotions. Instead of discounting to clear out stocks of unsold inventory, the retailer will develop a planned set of price promotions throughout the year designed to boost sales of clothing.
One thing Christopher & Banks will not be doing is launching a lot of stores. To conserve cash, the retailer said it will have "a limited number of store openings and thus minimize capital expenditures."
Thomas Lee 612-673-4113