Christopher & Banks to Cut 800 to 1,000 Jobs
Women's apparel retailer Christopher & Banks Corporation on Friday announced plans to shutter about 100 underperforming stores-a move that will likely result in roughly 800 to 1,000 layoffs.
The company, which reported a net loss in four of the last five quarters, didn't specify which stores will be closed but said that the majority of affected locations will be closed by the end of January.
As of Friday, the company operated about 760 stores in 45 states, including Christopher & Banks retail locations and CJ Banks, its plus size clothing division. It appears that the struggling company has been closing stores for some time: According to regulatory filings, it operated 806 stores as of February 2010.
Christopher & Banks currently operates 48 stores in Minnesota, and Senior Vice President Monica Dahl on Monday said in an e-mail that the company doesn't yet know whether any local stores will be among the approximately 100 closures.
The company expects to lay off an average of eight to 10 employees from each of the 100 planned store closures-meaning cuts will likely affect about 800 to 1,000 workers, according to Dahl, who said that the company expects to have more details about the layoffs and closures later this month. The actual number of affected employees at each location will be determined on a store-by-store basis, and it will vary based on store size; in addition, some brands will be consolidated into single stores.
Christopher & Banks employs approximately 6,200 people, including about 200 at its Plymouth headquarters, according to Dahl. Late last month, the company cut roughly 7 percent of employees at its home office and about 13 percent of its store management team; it is offering severance to those affected workers, of whom Dahl said there were fewer than 25. Going forward, that work force reduction is expected to cut annual costs by about $2.2 million.
The company expects that its recently announced initiatives will cost between $12 million and $16 million, including a charge of up to $7 million related to terminating leases and severance costs.
Christopher & Banks said it will work to renegotiate the terms of existing leases for the majority of its remaining stores. And it will accelerate its plans to convert or consolidate some of its existing Christopher & Banks and CJ Banks stores into dual-format stores.
President and CEO Larry Barenbaum said in a statement that the company expects the moves to “help us to both improve overall store productivity and support our return to profitability.”
Christopher & Banks is one of Minnesota's 50 largest public companies. For its most recently completed fiscal year, the company reported revenue of $448.1 million-down about 1.4 percent from the previous year-and a net loss of more than $22 million.
The company reported a net loss of $11.1 million for the first six months of this fiscal year, which ended in late August. That compares to net income of $3.8 million for the first half of its previous fiscal year. Same-store sales-stores open at least a year and an industry barometer-decreased 5 percent in the first half of fiscal 2012.
Investors appeared to react positively to the planned cost-cutting measures: Shares of the company's stock climbed about 6 percent to close at $3.01 on Friday; they closed at $2.87 on Monday.