Christopher & Banks CEO Keri Jones quickly put together a turnaround plan for the struggling women’s retailer when she took the helm 21 months ago. It started to bear fruit, with the retailer on Tuesday posting its first quarterly profit in three years.
The Plymouth-based company also saw an inflection point in its comparable sales, a key retail measure that increased 4.5% over the same period a year ago, Jones said.
Overall revenue increased 3% to $94.1 million in the quarter ended Nov. 2, and the company made a profit of $487,000, or 1 cent a share, compared with a loss of $8.8 million in the same period last year.
In the first quarter this year, the retailer saw net sales decrease 3% and a loss of $6.1 million. In the second quarter, sales dropped 4.5%, and the loss was $5.9 million.
Jones called the third quarter “pivotal,” as the company builds upon it to drive growth in the all-important holiday season and beyond.
“When I joined Christopher & Banks, I saw enormous untapped potential to address an underserved customer with a highly regarded and trusted brand and put in place a plan to capture this customer segment. Over the past 18 months, we have rebuilt our leadership team, dramatically improved and elevated our product assortment, enhanced our shopping experience across channels, significantly expanded our omnichannel capabilities, improved our inventory management, restructured our real estate portfolio, and reduced non-merchandise related cost,” Jones said in a conference call following the earnings announcement. “Layering upon these accomplishments, we most recently repositioned our marketing strategy, which is already having an impact on our business through new and re-engaged customers.”
The company, which targets baby boomer women, had a lot of work to do. While its stock increased 11 cents a share to close Tuesday at 36 cents, it’s still on the Pink over-the-counter market after being delisted from the New York Stock Exchange earlier this year. CreditRiskMonitor has it on its list of companies with a high chance of bankruptcy.
It also said it would close 40 of its 500 or so stores and had hired a firm to help it restructure real estate leases. The real estate company’s work saved Christopher & Banks $2 million this year and a projected $7 million in fiscal 2020.
Christopher & Banks said Tuesday the momentum from the third quarter would continue through the holidays and reiterated its guidance that sales would be flat to a 2% increase for the fiscal year. Jones said fourth-quarter measures are so far ahead of last year.
She said the third quarter saw strength in sweater sales, which are important drivers of holiday sales as well. Also, pants sales were strong, including the retailer’s new straight-leg style, showing the changes in inventory are working.
The cash liquidity from the stronger performance will allow the company to continue strategic changes, including enhanced marketing. The company updated its tagline in the quarter to “Life that’s real. Style that’s effortless,” as it increased advertising in all areas.
A big improvement is double-digit growth in new customers, Jones said. “We continue to see opportunities to capitalize on retail disruption.”
This quarter Christopher & Banks aggressively went after customers of Dressbarn, whose parent Ascena Retail Group decided to close.