Christopher & Banks Considering ‘Strategic Alternatives’ as Sales Plummet
Plymouth-based retailer Christopher & Banks Corp. revealed that the company is weighing “strategic alternatives,” which could include the sale of the company or filing for bankruptcy. The company has retained outside advisers, including an investment banker.
The company made the disclosure on Thursday morning in its earnings announcement for its fiscal third quarter of 2020, which ended on Oct. 31. Christopher & Banks’ third quarter sales dropped steeply – a 22.6 percent dive compared to the same period a year ago. On total sales of $72.8 million, the company saw a net loss of $10.8 million for the quarter.
In the wake of Covid-19, the company’s financial position has deteriorated to the point where it’s not clear if it can remain in business.
According to the retailer’s announcement, its current sales and cash flow position “raises substantial doubt about the company’s ability to continue as a going concern within one year after the date of the accompanying unaudited condensed consolidated financial statements.”
As of today, Christopher & Banks still operates 450 stores in 44 states under several different brands: 315 MPW locations, 76 outlet stores, 31 Christopher & Banks stores, and 28 CJ Banks locations.
“Results did not meet our expectations. We have not seen the level of sales recovery that we had anticipated. We believe that Covid has had an outsized impact on our customer demographic,” said Keri Jones, president and CEO of Christopher & Banks, in a statement. “As a result of our expectation that Covid will continue to negatively impact sales over the next several months, we made the decision to engage external advisers, including an investment banker, as we work to refinance our debt and explore other strategic alternatives.”
Jones, a 27-year veteran of Target Corp., took over as CEO in March 2018.
The company outlined a list of possible “strategic alternatives” that it is pursuing, including “further lease concessions and deferrals, further reductions of operating and capital expenditures, raising additional capital including seeking a refinancing of the company’s debt, sale of the company or its assets, and restructuring its debt and liabilities through a private restructuring or a restructuring under the protection of applicable bankruptcy laws.”
But the company’s statement makes it clear that there are no guarantees about the outcome.
“The company’s strategic plans are not yet finalized and are subject to numerous uncertainties including negotiations with creditors and investors and conditions in the credit and capital markets,” the statement read. “The company does not intend to disclose further developments unless and until the board of directors has approved a specific transaction or otherwise determined that disclosure is appropriate.”