Pre-releases financial data
In a move to alert the market about its new turnaround strategy, Christopher & Banks Corp. released key financial data late Wednesday -- about a month before its regularly scheduled earnings report.
The news indicates the strategy is working, according to CEO Joel Waller, who took over the Plymouth-based retailer's top position in February. Full financial results will be released Aug. 29.
The prerelease of the financial data is apparently aimed in part at a hedge fund that has lodged an unsolicited $64 million bid to buy the company. It's an offer that Christopher & Banks rejected earlier this month.
"We thought it was important that people understand we're not running out of cash, we're building cash, and that this business is working," Waller said.
The report shows that same-store sales -- a key indicator of a retailer's health that tracks stores open at least a year -- will increase 5 to 5.5 percent in the fiscal second quarter that ends Saturday. Sales for the quarter are expected to be between $102 million and $103 million, compared with sales of $105.6 million the same period last year.
"You have to remember that we're operating with about 100 fewer stores," Waller said, noting that 113 stores were shuttered as part of the turnaround strategy.
In addition, the company said it expects cash and cash equivalents to be $39 million to $40 million at the end of the quarter, compared with $33.7 million at the end of the first fiscal quarter.
Aria Partners, a hedge fund based in Los Angeles and Boston, has extended an offer to buy the retailer for $1.75 a share -- a 50 percent premium over the company's closing stock price a day earlier. Aria Partners already owns a 4 percent stake in the retailer. Christopher & Banks then adopted a poison pill defense against a hostile takeover.
In letters to Christopher & Banks' board, Aria executives have blasted the company's strategy and questioned the compensation of some board members. Aria spokesman Mickey Mandelbaum declined to comment on Christopher & Banks' financial report Wednesday.
The 653-store clothing chain, formerly named Braun's Fashions Corp., caters to women ages 40 to 60. The company has 44 stores in Minnesota.
Its new strategy involves editing the number of styles and items offered in the fall collection, reducing the variety of prices, improving inventory flow and developing a better marketing strategy that features unique promotions and fewer storewide sales.
Waller said the strategy will take time, as dated merchandise needs to cycle off store shelves to make room for new goods.
Christopher & Banks' shares closed at $1.62 Wednesday, up a penny.
Janet Moore • 612-673-7752