Women's apparel store Christopher & Banks is considering strategies including selling the company or seeking bankruptcy protection as customers remain hesitant to shop in its stores and its sales continue to suffer during the coronavirus pandemic.
The Plymouth-based retailer lost $10.8 million, or 29 cents a share, during its third quarter ended Oct. 31, the company said Thursday.
Sales decreased nearly 23% to $72.8 million in the quarter compared with the same period last year, an improvement from earlier in the pandemic when state mandates forced Christopher & Banks to temporarily close its stores and sales plummeted more than 50%.
Still, company performance was not as good as executives had hoped, the retailer said.
"We have not seen the level of sales recovery that we had anticipated," Keri Jones, the company's chief executive, said in a statement. "We believe that COVID has had an outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements."
Company officials declined an interview request. Public filings show it is talking to external advisers, including investment-banking firm B. Riley Securities Inc., to consider different options to improve the company's liquidity.
The company has kept doors open through the pandemic with the help of a $10 million loan from the federal Paycheck Protection Program, which it believes will be entirely forgiven. It has just $1.2 million in cash.
Alternatives include further lease concessions and deferrals for its stores, further reductions of operating and capital expenditures and refinancing the company's debt.
The retailer also is considering a "sale of the company or its assets and restructuring its debt and liabilities through a private restructuring, or a restructuring under the protection of applicable bankruptcy laws."
Christopher & Banks has a long history of serving older, value-conscious women.
The chain grew out of Braun's Fashion, which opened in Minneapolis in 1956 and went public in 1992.
It now operates 450 stores in 44 states, including outlet stores and its plus-size division, CJ Banks.
During the quarter, the retailer continued to see growth in online sales, which helped offset the company's decline, but even that appears to have flattened.
E-commerce sales increased about 32% compared with the same period last year, but still a far cry from the nearly 71% jump in the second quarter.
Because the retailer's core customers are older, they are more likely to avoid health risks of going out shopping. Jones said company managers believed customers were still hesitant to shop in brick-and-mortar stores.
Before the arrival of the coronavirus, Jones, a former Target Corp. executive, had been engineering a turnaround at the retailer, which has a loyal following but has struggled to maintain consistent profits through the years.
Christopher & Banks was delisted from the New York Stock Exchange in April 2019 because its market capitalization had dropped below $15 million for more than 30 days.
Shares have since been trading on the Pink Market, operated by the OTC Markets Group.
In July S&P Global Market Intelligence included Christopher & Banks as one of 15 publicly traded retailers that are most vulnerable of defaulting, with a 27% probability of going into default within two years.
Shares Thursday were down 15 cents to close at 14 cents.
Staff writer Jackie Crosby contributed to this report.
Nicole Norfleet • 612-673-4495