Specialty retailer Christopher & Banks saw net sales fall nearly 52% in February, March and April after the women’s clothing chain was forced to temporarily close its stores because of the coronavirus pandemic.
“Over the last three months, we’ve experienced a global health and financial crisis that is more severe than anything we’ve ever seen before,” said Keri Jones, chief executive of Christopher & Banks, during a Friday earnings call.
The fiscal year had started off strong with nearly 5% comparable sales growth in February before stay-at-home orders across the country forced the Plymouth-based retailer to close its stores in March.
“Prior to the COVID-19 pandemic we were both pleased and highly encouraged with the momentum in our business,” Jones said. “We had made tremendous progress across our strategic initiatives which was reflected in our strong comp growth, our operating margin expansion and our growing customer file. All of these trends pointed to a promising future.”
In all, Christopher & Banks reported a loss of $17.2 million for its first quarter, which ended May 2.
During the quarter, the company dipped into its cash and credit reserves.
Christopher & Banks’ available cash and cash equivalents fell to just $200,000 for the quarter, with $16.8 million in outstanding borrowing and $4.1 million of credit available. In the last quarter, which ended Feb. 1, the company had $3.2 million in cash available with no outstanding borrowing and about $16.7 million of credit available.
Earlier this month, after the quarter ended, Christopher & Banks was granted a $10 million Paycheck Protection Program loan to help offset the impact of COVID-19.
In addition to its closure, the company furloughed all of its retail staff and more than 60% of its remaining workforce. Corporate employees and management had their base salaries temporarily reduced from 20% to 50% for the CEO.
Christopher & Banks was one of several local companies to withdraw its financial forecast for the remainder of the fiscal year “due to the fast-moving nature and uncertainty of the impacts of COVID-19.”
The retailer also canceled as much of its spring and summer inventory orders as it could and temporarily stopped rent payments to its landlords during the store closures, Jones said.
As of Friday, Christopher & Banks had reopened about 90% of its stores.
Despite the challenges, store leaders reported growth in e-commerce.
Quarter-to-date digital sales are up 50%. Some of its store-only customers have begun to purchase online for the first time, Jones said.
This week the brand launched a stylistic software application to assist customers with outfitting online. Jones said the store’s more casual style also would continue to be well-received “as we expect work from home to be part of the new normal.”
“As challenging as this situation has been, I believe that our brand will be positioned to thrive as we emerge from the crisis,” Jones said.