Christopher & Banks Sales to Decline, Stock Down
Women's specialty apparel retailer Christopher & Banks Corporation saw its stock plunge Wednesday after the company announced that it anticipates a third-quarter drop in same-store sales.
Minneapolis-based Christopher & Banks said that it's expecting same-store sales-sales at stores open at least a year and an industry barometer-to be 8 percent to 10 percent lower than they were during the same period last year. Additionally, per-store inventory, which excludes e-commerce, is expected to be up 12 percent to 14 percent at the end of the quarter due to the lower-than expected sales. The company also expects total gross margin to drop by 500 to 650 basis points within the quarter, which will end November 27.
Following the news, Christopher & Banks' stock closed down 10.6 percent at $5.17 on Wednesday.
“We are disappointed with our performance during the third quarter,” Interim President and CEO Larry Barenbaum said in statement. “While we saw some positive signs in September, overall to date, most categories have performed below expectations which, coupled with lower traffic and unseasonably warm temperatures, led to lower sales and operating results than anticipated.”
Christopher & Banks has struggled in recent years amid tightened consumer spending prompted by the recession. It reported a $2.5 million loss on revenue of $101.3 million during the most recent quarter, which ended in August. During the most recent fiscal year, which ended in February, Christopher & Banks posted a $158,000 loss on $455.4 million. Since 2006, when shares of the company's stock were close to $30, they have slowly declined in value.
However, Barenbaum said that following recent organizational changes, including the return of a former merchandise executive, he is “confident in our ability to develop product designs that better align with our loyal customers' preferences. Given our product lead times, we expect to see the initial effect of these efforts to a modest degree in our summer 2011 product offerings. However, the full impact on the merchandise assortment is expected to be reflected in our early fall 2011 deliveries.”
Last month, Christopher & Banks announced that then-CEO Lorna Nagler, who joined the company in August 2007, had resigned all positions within the company, effective immediately. The company said only that she left “to pursue other interests.” At that time, Barenbaum was named interim CEO and the company said that a search for a permanent successor was underway.
Christopher & Banks operates 789 stores in 46 states and offers its apparel on two Web sites.