A great pair of jeans and some pretty, new underwear and tight inventory control could help lead Charming Shoppes out of the recession.
At least that’s what execs are hoping at the Bensalem, Pa., operator of more than 2,400 Lane Bryant, Fashion Bug and Catherines stores, which finished its fiscal year posting a net loss on $3 billion in sales.
With the economy slumping, women have turned from recreational retail to replacing necessities. “We’re not seeing the kind of outfit selling that we’ve seen in the past. We’re seeing the one off, the great new item, the great new jacket,” Chairman and CEO, Dorrit Bern, told analysts.
Lingerie, however, sold well across brands and channels, with 2,000-square-foot Cacique intimate apparel boutiques now open in 100 Lane Bryant stores. Still, Charming Shoppes is in the process of closing 150 stores, including 100 Fashion Bug outlets, and its shuttering a whole brand — Petite Sophisticate.
Management opted to sacrifice margins in favor of hitting inventory targets, discounting heavily through the Christmas season. As a result, comp store inventories fell 19 percent year over year in February, said CFO Eric Spector, and spring sales are weighted toward new items instead of clearance, so “the inventory that we are selling is now starting to recover a more normalized margin.”
Cautious sourcing will continue from direct manufacturers, Bern said, and they’re hoping not to get stuck with more outfits than women who can buy them.
