By and  on August 26, 2009

Retailers might be in a funk, but they aren’t standing still.

New York & Company Inc. and Coldwater Creek Inc. posted losses for the second quarter ended Aug. 1, and Charming Shoppes Inc. eked out a profit despite a decline in sales. But the three specialty retailers are busy tweaking their businesses, readying themselves for the day when consumer spending rebounds.

New York & Co. is bringing in more denim, activewear and dresses and working to improve its accessories offering and has been able to put the savings from its cost cuts into improving the product, said Eric Beder, an analyst at Brean Murray, Carret & Co.

“Until the consumer comes back, no one cares,” Beder said. “When the consumer comes back, I think New York & Co. will be a huge success.”

For now, Beder said retailers are making or exceeding Wall Street estimates by cutting costs and tightly controlling inventory.

“New York & Co. is the poster child of this,” he said.

The retailer turned in losses of $4.8 million, or 8 cents a diluted share — on par with analysts’ estimates. This compared with year-ago profits of $8.8 million, or 14 cents. Sales fell 16.2 percent to $247.8 million from $295.7 million. The company’s selling, general and administrative expenses declined by $9.9 million in the quarter.

“We have implemented a marketing message that is better aligned with the mind-set of consumers today and we are seeing improvements in categories that have previously lagged our overall results,” Richard Crystal, chairman and chief executive officer, said on a conference call.

At Charming Shoppes, Jim Fogarty, the turnaround specialist who took the helm as president and ceo in April, is shoring up finances, beefing up Internet and sourcing capabilities and restructuring the ailing Fashion Bug chain.

The Bensalem, Pa.-based retailer posted second-quarter profits of $5 million, or 4 cents a diluted share — a penny ahead of the 3 cents analysts expected. This compared with year-ago losses of $10.7 million, or 9 cents. Revenues slid 18.7 percent to $527.2 million from $648.6 million.

Comparable-store sales at the Lane Bryant division fell 13 percent as Fashion Bug’s comps fell 18 percent and Catherines’ slid 9 percent. Selling, general and administrative expenses were cut by $30.2 million and the company bought back $38.2 million worth of its own debt for 55 cents on the dollar. The company also has $117 million in cash on hand.

“We are repositioning the [Fashion Bug] brand, exiting juniors, girls and a number of misses’ sizes, remerchandising the floor to present plus and remaining misses’ sizes together in a lifestyle format and moving away from extreme high-low pricing,” said Fogarty.

And Coldwater Creek said it was going to make additional investments in marketing and inventory to drive traffic and sales.

“We have made substantial changes to our merchandise, intensely focusing on creating a compelling assortment and experience,” said Daniel Griesemer, president and ceo. “Our initiatives in fit, fashion sensibility and value are fully reflected in our fall assortment and we are beginning to realize the benefits.”

The Sandpoint, Idaho-based retailer posted a net loss of $4.9 million, or 5 cents a share, which compared with a year-ago profit of $3.1 million, or 3 cents. Revenues contracted 6.7 percent to $225.2 million from $241.4 million.

In what was generally an up day for retailers in the stock market, shares of New York & Co. rose 3.2 percent to $4.91 and Charming Shoppes’ stock slipped 2 percent to $5.32. Coldwater Creek saw its stock rise 0.4 percent to $7.18 prior to its after-market release of second-quarter results.

The S&P Retail Index advanced 0.7 percent, or 2.54 points, to 369.63.

The only break-away gainer in the retail sector was The Bon-Ton Stores Inc., which saw its stock shoot ahead 21.7 percent to $5.90. A total of 565,442 shares traded hands Wednesday, more than six times the average for the past three months.

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