Christopher & Banks is still trying to figure out what exactly its customers want — and it’s apparently not leggings.
After reporting another drop in quarterly earnings and profits Tuesday, executives of the Plymouth-based apparel retailer said leggings have languished on its store shelves despite being a fashion trend this year. Its middle-aged female shoppers gravitate to looser-fitting styles.
“It really just hasn’t worked for us,” said LuAnn Via, the company’s chief executive. “I think it’s mostly because it’s more constrictive for our customer. So that was a big miss.”
In recent months, Christopher & Banks’s sales have plummeted and its stock has tumbled to barely above $1, its lowest level in more than three years, as its customers have resisted some of its more fashion-oriented styles.
Executives have been hustling to tweak its assortment in order to find a better balance giving customers the classic looks they love with a new spin.
Sales of activewear, which has been another popular trend in the apparel world, have also been soft at Christopher & Banks. So the retailer is going back to its manufacturers to get looser styles that don’t hug the body as tightly.
Still, “there were a number of product wins, as our customers responded to classic and easy-fitting styles, which were more reminiscent of heritage styling,” Via told analysts on a conference call Tuesday.
Thematic and print tops performed well, she said. In particular, one of its best sellers that struck the right chord between classic and updated styles was a sweater with a deer on it that says “Oh deer.”
As its sales have been dropping, Christopher & Banks recently hired an outside consultant to do an in-depth business review to help identify the biggest drivers of its declines in sales and profitability. A company spokeswoman said the consultant has finished a survey of customers and will meet with focus groups in the coming weeks to finish the evaluation. The company hopes to have a plan in place by the end of January.
On Tuesday, Christopher & Banks reported a loss of $300,000, or 1 cent a share, in its fiscal third quarter ending Oct. 31. That compares to a profit of $9 million, or 24 cents a share, in the same quarter a year ago.
Sales dropped 6 percent to $103.6 million. Company executives said they expect sales to drop 3 to 7 percent in the fourth quarter. Its stock closed at a penny higher at $1.10.
Still, Via noted that the sales and profit declines were in line with the company’s expectations, especially given the challenges in the women’s apparel market overall and the unseasonably warm weather that has been a problem for other retailers such as Nordstrom and Macy’s.
The retailer, which operates about 540 stores, has been consolidating many of its plus-sized CJ Banks stores and its Christopher & Banks stores to a one-store format that includes a wider range of sizes, including petites. While the company remains committed to that strategy, Via said customers have said that the new formats seem to have a smaller selection. So the retailer has begun testing a new layout that combines the sizes throughout store instead of placing missy sizes on one side of the store and plus sizes on the other.
That reshuffling has just been completed at the company’s Eden Prairie and Mall of America stores, a spokeswoman said.
The company has also recently reorganized its merchandising team to separate the sourcing from the product development operations in order to help usher in more accountability. A couple of executives left in the overhaul.
Meanwhile, Christopher & Banks continues to pour resources into fighting an activist shareholder who has been pushing executives to consider a sale or new management in light of its struggles. Executives told analysts that the firm has spent about $700,000 so far this year on legal and other expenses related to that tussle and expect that number to surpass $1 million by year’s end.