Christopher & Banks Sees Improvement During “Pivotal Period”
Christopher & Banks on Wednesday reported an increase in same-store sales and a narrower operating loss for what it called “a pivotal period” in the company’s turnaround attempt.
The Plymouth-based women’s clothing retailer said that same-store sales—sales at stores open at least a year and a key measure of a retailer’s health—climbed 5.5 percent during the quarter that ended July 28 as compared to the same period a year ago.
CEO and President Joel Waller, who took the helm after former CEO Larry Barenbaum abruptly resigned in February, said in a statement that the improved sales were driven by “the execution of our merchandising and marketing strategies,” adding that “we have substantially completed our real estate restructuring program and signed a new credit agreement that enhances our financial flexibility.”
“Overall, the second quarter was a pivotal period for Christopher & Banks, and we look forward to building continued momentum in the second half of fiscal 2012 and beyond,” Waller said.
Shares of Christopher & Banks’ stock climbed nearly 6 percent to $2.50 on news of the quarterly earnings but were trading at $2.38 early Thursday afternoon.
The company’s second-quarter net loss totaled $2.2 million, or 6 cents per share, representing a significant improvement from its loss of $6.3 million, or 18 cents per share, during last year’s second quarter.
Total revenue, meanwhile, slid 2 percent to $103.4 million—but the company operated about 15 percent fewer stores during this year’s second quarter. Christopher & Banks has cut hundreds of jobs and closed more than 100 stores within the past year, including 17 in the second quarter. The company now operates 644 stores in 44 states.
Waller said that the company’s second-quarter performance “marked improvement in our business, demonstrating that our strategic initiatives are taking hold.”
Late last month, Christopher & Banks issued preliminary second-quarter results in an attempt to demonstrate that its turnaround strategy is working, and the official results released Wednesday were in line with the company’s predictions. Waller said at the time that the company remains in “the early stages” of its turnaround plan, but its “initiatives are gaining traction.”
The preliminary quarterly announcement came out less than two weeks after Christopher & Banks was blasted by a minority investor and would-be buyer, and it appeared to be in response to that criticism. Boston-based investment management firm Aria Partners in early July extended an unsolicited, $64 million buyout offer. Christopher & Banks rejected the bid, and Aria Partner Edward Latessa responded with a sharply worded letter of ridicule to Christopher & Banks’ non-executive Chairman Paul Snyder. In it, he said the board’s credibility in terms of turning the company around was “worthless based on its record thus far” and questioned the compensation of Snyder and another board member.
Christopher & Banks has said that its turnaround strategy involves reducing the number of styles offered this fall and “rebalancing” its assortment; lowering prices and reducing the variety of prices; improving inventory flow by reducing the number of major floor sets by half; and developing a promotional strategy that features more targeted, unique promotions and fewer storewide events.