US: More cost-cuts as Charming Shoppes closes 150 stores
US retailer Charming Shoppes has unveiled a new round of cost-cutting measures, including the closure of 150 stores and a US$40m cut to its fiscal 2009 capital budget.
The new initiatives come after a raft of similar initiatives was announced last November, including the axing of 150 jobs and the relocation of the company's Catherines home operations to its headquarters at Bensalem.
Charming Shoppes said the measures were a result of its ongoing business review, itself a response to the continuing weak retail and economic environment.
They were aimed at streamlining business operations, reducing expenses and capital expenditure, improving cash flow and enhancing shareholder value, the company added.
The company is cutting $40m from its fiscal 2009 capital budget, representing a 30% cut from its 2008 budget and a 50% reduction in new store openings.
The cut also covers a 20% reduction in relocations and cuts to infrastructure spending.
About 150 loss-making stores will be closed, including 100 Fashion Bug outlets, and the company's Petite Sophisticate full-line retail concept is to be shut down.
Charming Shoppes said the measures would result in about $20m in annualised pre-tax savings, offset by one-off, pre-tax charges of about $17.3m.
Dorrit Bern, chairman, CEO and president, said: "Today's announcements, in conjunction with initiatives we announced in November, will enable us to further sharpen our focus on our core businesses, reduce SG&A and capital spending, including a pull-back on new store growth, and ultimately improve cash flow.
"These were difficult but necessary actions and we are confident that by streamlining our operations, realigning our field management structure and reducing the number of positions at our corporate headquarters, we will further strengthen Charming Shoppes' operational and financial performance."
For editorial comment on this story, see: Charming Shoppes lacks lustre
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