US: Charming Shoppes to relocate Catherines unit, lowers outlook
Women's plus-size apparel retailer Charming Shoppes Inc is to relocate its Catherines Plus Sizes subsidiary into its Bensalem, Pennsylvania headquarters as part of a number of cost-saving initiatives announced yesterday (8 November).
Catherines will move from Memphis, Tennessee by the end of March, which will lead to annual cost savings of $8m, the company said.
Human resources, finance, allocations, and other retail brand support functions will be combined across the Fashion Bug, Catherines Plus Sizes, and outlet businesses, although merchandising and product development functions will continue to operate separately within each retail brand.
Charming Shoppes did not comment on the number of jobs involved.
The move will result in a one-time, pre-tax expense of $4m related to severance, retention and relocation costs, and $4.5m in pre-tax charges related to write-downs of fixed assets in Memphis.
Other proposals announced by the company include merchandise and marketing initiatives, the launch of the Lane Bryant Woman catalogue, expansion of the Lane Bryant credit card, and a new $200m share repurchase programme.
Dorrit J Bern, chairman, chief executive officer and president, said the measures have been taken in response to a "difficult retail environment."
"The retail apparel industry, as a whole, continues to be challenged," Bern said. "We have experienced difficult trends in each of our businesses, with slowing traffic levels during the month of October, particularly at our Lane Bryant brand.
"As a result, our autumn selling season has had a slow start. Given this difficult environment, we expect the holiday season to be highly promotional throughout our industry."
The retailer, which operates 11 catalogues, as well as 2,425 stores under the names Lane Bryant, Fashion Bug, Fashion Bug Plus, Catherines Plus Sizes, Petite Sophisticate, Lane Bryant Outlet, and Petite Sophisticate Outlet, lowered its projections for the third quarter.
It now expects to swing to a third quarter loss of $0.02 to $0.04 per share, compared to earnings of $0.15 in the same period last year. It previously forecast profit at break-even level.
For the fourth quarter, earnings per share expectations have been lowered to $0.00 to $0.03, from $0.11 to $0.16. This compares to $0.19 per share for the corresponding period last year.
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