By  on September 19, 2007

"It was definitely our best year ever."

That was Dress Barn Inc. president and chief executive officer David R. Jaffe raving about the fiscal 2007 performance of the Dress Barn and Maurices chains, highlighted by a 38 percent jump in net earnings in the fourth quarter to $33.6 million, or 48 cents a diluted share, compared with $24.4 million, or 35 cents, for fiscal 2006. Fourth-quarter comparable-store sales rose 5 percent, and total sales increased 11 percent to a record $379.9 million from $343.3 million.

For the year, earnings rose 28 percent to $101.2 million, or $1.45 a share; comp sales increased 5 percent, and total sales rose 10 percent to a record $1.43 billion. The company predicts earnings per diluted share for fiscal 2008 of $1.40 to $1.50, and 3 to 4 percent comp sales growth.

Now the company is hunting for a chain to buy, after its successful integration of Maurices, which it bought two-and-a-half years ago.

"Maurices has given us the confidence to look for another acquisition," Jaffe told WWD. "With the turmoil in the credit markets, the prices have come down a great deal. Some companies priced out of our range now are possible. Right now there is absolutely nothing we're working on, but there are a lot of things we're looking at."

An acquisition must meet "a long list of criteria" established by Dress Barn, including being a branded apparel specialty business, and moderately priced or a little higher, Jaffe said.

"We were fortunate that Dress Barn and Maurices really continued their momentum. We've had a pretty good run at both brands for the last four years. This was our fourth year in a row of positive comps. As a result, we've been able to get pretty good leverage on earnings and increase our operating margin. We've continued our [level of] marketing at Dress Barn and really stepped up marketing at Maurices."

Keith Fulsher, executive vice president and chief merchandising officer of the Dress Barn division, credited gains to the chain's "wide" assortment encompassing career, casual, special occasion, jewelry and accessories. He cited knit dresses, long tops, A-line silhouettes and dressy special occasion sportswear among recent bestsellers.The missy Dress Barn chain accounts for two-thirds of the company's volume. Maurices, for juniors, accounts for a third, though it's growing faster than Dress Barn.

Jaffe did express some concern going forward, noting the missy customer is pulling back a little bit, while younger customers are out there "in full force." Cooler weather in the past week has encouraged some shoppers, Jaffe said, adding he's optimistic Dress Barn will improve moving deeper into fall and into holiday and spring.

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