(Filed Under Financial and General Interest News). Charming Shoppes reported weaker-than-projected results by both the company and Wall Street for the second quarter ended August 1st, 2009. The multibrand, plus-size women’s retailer cited an 18.7 percent plunge in net sales during the quarter; to $527.2 million from $648.6 million during last year’s second quarter. According to the company, the steep drop in sales was primarily due to a 14 percent decrease in comparable store sales, and the impact of closing 120 stores and opening only 21 during the last four quarters. Comparable store sales for the company’s Lane Bryant brand decreased 13 percent, while Fashion Bug and Catherines dropped 18 and 9 percent, respectively.

Gross profit decreased 12.9 percent, to $263.9 million from $302.8 million. The company attributed this drop—partially offset by improvement in the gross margin rate—to a lower sales volume.

In recent news, Charming Shoppes has entered into an agreement to sell its credit card receivables program to Alliance Data Systems corporation, and expects to receive net cash proceeds of approximately $110 million relation to the transaction at closing. Charming Shoppes and Alliance Data have additionally entered into a 10-year operating agreement for the servicing of Charming Shoppes private label credit card receivables program. The company has also entered into a three-year loan agreement for a new senior secured revolving credit facility in the amount of $225 million.

"Our consolidated results for the quarter continued to reflect a difficult retail environment, delivering both disappointing comparable store sales and earning power,” Jim Fogarty, president and chief executive officer of Charming Shoppes, said. “Our sales reflected negative but generally improving comps to last quarter at our Lane Bryant and Catherines brands, as we made progress on more balanced and compelling assortments. Our Fashion Bug brand had a difficult second quarter with spring and summer assortments that were not compelling to our consumer; however, our assortments did not yet reflect our new product leadership. On profitability for the quarter, we were able to offset volume declines with disciplined inventory management, gross margin improvement, and reductions in both SG&A and Occupancy expense. Finally, we are positioned for the third quarter with much less seasonal carry-over inventory than in the prior year.”

As of the end of the second quarter, Charming Shoppes, Inc. operated 2,258 stores in 48 states under the Lane Bryant; Lane Bryant Outlet; Fashion Bug; Fashion Bug Plus; Catherines Plus Sizes; and Petite Sophisticate Outlet brand names.

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Published 08-27-2009 by Amanda Torres Price