(Filed Under Financial and General Interest News). Charming Shoppes, Inc., parent company of specialty retailers Lane Bryant, Catherines and Fashion Bug, reported a 7 percent decrease in sales for the third quarter of 2011. The company also announced plans to divest Fashion Bug and focus on accelerating the growth of the Lane Bryant brand.
Net sales came to $429.7 million, compared to $463.6 million last year. The 7 percent decrease includes the impact of operating 168 fewer stores than in the third quarter of 2010. Comparable store sales were down 4 percent, while e-commerce sales rose 10 percent and sales in Lane Bryant stores remained flat.
Gross profit came to $232.8 million, or 54.2 percent of sales in the quarter, compared to $254.1 million, or 54.8 percent of sales, in the prior year’s period. Year to date, sales have reached $1.43 billion, down 3.5 percent from $1.49 billion in the first nine months of 2010.
"We are currently engaged in a number of initiatives that we believe will further improve our business and enhance shareholder value," stated Charming Shoppes president and C.E.O. Anthony M. Romano. "While we have made progress in improving Fashion Bug’s profitability, we believe that it does not fit within our future strategic plan. Concurrent with this process, we are assessing the appropriate expense structure for the company in light of the planned divestiture of Fashion Bug."
Charming Shoppes has engaged Barclays Capital as its financial advisor to assist exploring a range of strategic alternatives, though the focus will be on the company’s profitable and well-known Lane Bryant chain. "With that retail nameplate as our foundation, we expect to invest in and focus on that business, using its strong consumer franchise and leading market position to drive our sales and profits," said Romano. "Over the next few years, we expect to expand the Lane Bryant footprint to approximately 900 stores, resulting in approximately 750 full-line Lane Bryant stores and 150 Lane Bryant Outlet locations."
Charming Shoppes, Inc. currently operates 1,929 Lane Bryant, Cacique, Lane Bryant Outlet, Catherines, Fashion Bug and Fashion Bug Plus retail stores in 48 states.
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