US: Christopher & Banks Q2 hurt by higher prices
- Q2 net loss widened to $13.0m
- Total sales were down 5% to $96.2m
- Same store sales slipped 8%
A drop in sales as shoppers rejected its price rises and "over-engineered" fashions have contributed to a wider second quarter loss at women's apparel retailer Christopher & Banks Corporation.
The company, which operates 772 stores, said net loss widened to $13.0m or $0.37 per share in the three months to 27 August. This compares with a loss of $2.5m or $0.07 per share, in the same period last year.
Total net sales were down 5% to $96.2m from $101.3m, and same store sales slipped 8%.
The company also said gross profit dropped 22.3% to $27.8m from $35.8m, with gross profit margin falling to 28.9% from 35.3% in the second quarter of fiscal 2011.
"In our efforts to improve the merchandise, we over-engineered the product and we were too optimistic about the level of price increases our customers were willing to accept," explained president and CEO Larry Barenbaum.
"We are working to reduce inventory receipts for the fourth quarter of the fiscal year and are planning for further reductions in inventory buys for spring.
"Given our lead times, we do not have the ability to make significant adjustments in merchandise to reduce the product cost of our holiday and early spring buys. We are, however, moving aggressively to make adjustments to our late spring and summer assortments."
As a result, the retailer expects a "highly promotional" second half. In the third quarter, same-store sales are seen flat to a low single digit increase, but total gross margin could be down by up to 1,000 basis points due to increased promotional activity and higher product costs.
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Christopher & Banks' newly appointed interim CEO Joel Waller has revealed plans to cut average prices at the US women's wear retailer by approximately 20%. ...
Christopher & Banks admitted that its merchandise was priced too high during the third-quarter as the US women's wear retailer saw losses mount over the period. ...
Women's wear retailer Christopher & Banks Corporation is seeking a new chief executive officer after Larry Barenbaum resigned on Friday (17 February)....
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