Another CEO is out at beleaguered Christopher & Banks.
The Plymouth-based women’s clothing retailer, which has suffered a lot of executive turnover over the years amid various turnaround attempts, had some stability in the last four years under LuAnn Via. But on Tuesday, a recently overhauled board of directors fired her after sales took an unexpected downward turn during the holidays.
The news, including a lowered guidance for the fourth quarter, sent the company’s shares plunging 32 percent.
Via, who was hired as CEO in November 2012 from Payless ShoeSource, was terminated “without cause,” Christopher & Banks said in a filing with securities regulators. She will receive a $850,000 severance, an amount equal to her annual base salary, and be paid for accrued vacation and other incentives.
She has been replaced on an interim basis by the same retail veteran who preceded her. Joel Waller, 77, the former CEO of The Wet Seal and Wilsons Leather, served as interim CEO in 2012.
The leadership change came about seven months since four new directors joined the company’s board and six directors exited as part of a “support agreement” reached with an activist shareholder, Jonathan Duskin of New York-based Macellum Capital Management. Duskin was one of the new board members along with Kent Kleeberger, a former executive of Chico’s.
On Tuesday, Christopher & Banks also disclosed that Lisa Wardell, the previous board chairwoman, resigned last week. Kleeberger has been elected the new board chairman.
In a statement, Kleeberger said the company will continue to cut costs and “identify growth opportunities and strategic transactions.”
When Duskin, the activist shareholder and now board member, first began making overtures to the board in 2015, he urged the company to explore a possible sale in light of its inability to reverse declining sales.
He also questioned the board’s decision to replace Waller with Via, noting that the company saw improved results under his leadership and suggested the company add him to the board — a suggestion that was not followed at the time.
Waller is also an investor in the Macellum Retail Opportunity Fund, which owns 10.3 percent of Christopher & Banks’ shares and is run by Duskin.
Christopher & Banks, a chain that currently has about 500 stores aimed at middle-age and baby boomer women, had trouble finding its footing coming out of the Great Recession.
The company saw some promising results in Via’s first two years as she refocused it on basics, such as pants and denim, and accelerated the consolidation of plus-sized CJ Banks stores to a blended Christopher & Banks format that includes missy’s, petites and plus sizes. The company returned to profitability after three straight years of losses.
But the turnaround stalled in 2015 amid merchandising misfires, unexpected weather and declining mall traffic. A number of apparel-focused chains fell recently as consumers gravitated to off-price chains, such as T.J. Maxx, and online sales.
Last month, Christopher & Banks executives sounded upbeat about the holidays after posting improved results in the fall. But Tuesday, the company lowered its earnings outlook for the fourth quarter, citing lower traffic, softness in the women’s apparel market and weather. The biggest declines came the last two weekends before Christmas, when sales fell about $4.5 million.
Christopher & Banks now expects net sales for the quarter to be between $85 million and $86 million, lower than the $93 million to $97 million range it forecast last month.
Because sales were so soft, it ended up marking down prices more than expected to help clear out inventory. As a result, the company now expects a net loss in the fourth quarter of between $16 million and $17 million, including the costs associated with the change in management. It had previously forecast a loss of $4.1 million to $5.9 million.