Christopher & Banks looks ahead despite loss

  • Article by: JACKIE CROSBY , Star Tribune
  • Updated: June 5, 2012 - 7:01 PM

The retailer's sales and earnings fell, but the latest leadership team has plans.

Plymouth-based specialty retail chain Christopher & Banks continued its downward slide in the first quarter, but on Tuesday a new executive team highlighted efforts to stop the bleeding and regain profitability.

The women's clothing retailer, which caters to middle-aged women, said its net loss widened 63 percent to $13.4 million, or 38 cents per share, compared with a similar period a year ago. Sales dipped 15 percent to $93.6 million for the quarter ended April 28.

The poor performance came in "as anticipated," said CEO and president Joel Waller, a former Wilsons Leather executive who took over four months ago.

Losses came from aggressive markdowns to clear out inventory from the holiday season and early spring as well as charges for restructuring and closing more than 100 stores.

Inventory was up 22 percent at the end of the quarter, a sign that customers are cool to the offerings based on either style or price.

The company has lacked the resilience to weather the lingering economic downturn and has seen turmoil in the executive suite for a number of years. The company lost $22.2 million in fiscal 2011, its worst annual loss. Longtime board member Larry Barenbaum, who took over as CEO in October 2010, retired in February.

Christopher & Banks operates about 665 stores, including its namesake brand as well as 183 C.J. Banks stores for plus-sized women, 64 dual stores and 25 outlets.

Waller has brought in a new merchandising team, whose full assortment will be on display by September. In April he hired Peter Michielutti as chief financial officer. Michielutti was the CFO at Wilsons Leather and at Fingerhut and most recently held the same post at a commercial real estate company, CSM Corp.

In a conference call with analysts, Waller said he had seen "encouraging signs" with the new merchandise, which has been tested in some stores, and a private-label credit card the company launched in April.

About 80 percent of cards were opened by existing customers, but about 10 percent of people who opened card accounts hadn't shopped in more than a year, and another 10 percent had never shopped there before, he said. About 7 in 10 shoppers using the card made more purchases than the company average.

"We think this is a very big upside for us," Waller said.

Company officials did not provide specific earnings guidance, but said they expect to see positive same-store sales growth in the second half of the year and to return inventory to "acceptable levels" by the end of September.

Results came after the markets closed. Shares closed at $1.07 and were down slightly in after-market trading.

Jackie Crosby • 612-673-7335

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