USA: Charming Shoppes Axes 285 Jobs, Swings To Q4 Profit
The Pennsylvania-based operator of 2,250 stores under banners such as Fashion Bug and Catherine's Plus Sizes, reported a profit of $4 million, or four cents a share, compared to a year-ago net loss of $27.8m, or 25 cents a share.
Excluding a credit for an earlier restructuring charge, earnings were $1.9m, or two cents per share, in the latest quarter while total sales fell seven per cent year-on-year to $601.2m and same-store sales slipped four per cent.
Charming Shoppes said it would axe 160 jobs at its corporate and divisional home offices and 125 jobs in other operations. It said it expects the plan, which includes the closure of nine stores, to boost its annual pre-tax earnings by about $45m.
For the full year, it posted a net profit of $46.3m, or 39 cents a share, versus a net loss of $4.4m, or four cents a share, in the year-ago period. Excluding the restructuring charge, net income was $20.1m, or 19 cents per share.
Total sales for the year, which include sales from Lane Bryant, jumped 21 per cent to $2.41 billion from $1.99bn in 2001 but same-store sales slipped two per cent.
Commenting on the cost-cutting plan, president, chairman and CEO, Dorrit Bern, said: "We have grown our revenue base rapidly, from $1bn a few years ago, to $2.4bn in 2002, yet we have not sufficiently rationalised our operations and realised all the efficiencies available to us in order to improve our profitability.
"We have laid the groundwork, and are now in the position to take advantage of the centralisation of all corporate administrative services throughout the company.
"Our plus-size apparel strategy is sound, and we have complete conviction in the long-term growth prospects for plus-sizes. The plus-size apparel market continues to grow, with strongly supportive demographics, and Charming Shoppes' core brands are well positioned to serve a diverse base of plus-size customers.
"While our strategic focus continues to be on increasing revenue and margins, particularly at our Lane Bryant brand, our immediate focus is to reduce our cost structure and leverage our size through efficiencies in operations."
Asked about the 2002 results, Mr Bern added: "We, like most retailers, faced many challenges during the year, including a weak economy and an uncertain geopolitical climate, which negatively impacted consumer spending.
"The most disappointing development during the Fall and Holiday season was the performance of our Lane Bryant brand. As we have previously discussed, a turnaround plan is now being executed at Lane Bryant, which will result in improved merchandise assortments for Fall 2003."
Companies: Charming Shoppes
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