With sales and traffic sluggish, Charming Shoppes Inc. has shifted management and is hoping new fit and product programs will bolster business later this year.
Charming named LuAnn Via group divisional president over the Lane Bryant and Cacique divisions. Via succeeds Lorna Nagler. A search has begun for a new president of the Catherines division, which Via ran since January 2006. Dorrit J. Bern, chairman, chief executive officer and president of the corporation, will run Catherines in the meantime.
"The change in our executive leadership was a decision of the company," said Gayle Coolick, director of investor relations.
Via, a 30-year veteran of retailing, held senior-level jobs in merchandising and product development at Sears, Roebuck & Co., Saks Inc. and Rich's, which is now called Macy's, before joining Charming. "LuAnn has exhibited strong leadership and merchandising capabilities, and has had great success in driving the brand's financial performance," Bern said in a statement. "She possesses a keen eye for identifying growth opportunities, as well as the drive and creativity to capitalize on them."
Charming, based in Bensalem, Pa., is the dominant specialty store player in the large-size market with a 40 percent share. The company posted $3.1 billion in sales last year, of which 72 percent was in large sizes. The total large size market in the U.S., including discounters, department stores, specialty chains and direct, is $18.5 billion.
For the second quarter, net income was $26.3 million, compared with $32.1 million a year ago, and comp-store sales were flat. Officials blame recent poor sales trends on internal and external factors, such as the weather. However, Coolick added: "When we look at our business, we wish we had a higher degree of fashion component. It's not that we missed trends. We missed the volume opportunities."
The large-size sector is getting more competitive. Talbots sees it as its fastest growing business and Maurices recently introduced large sizes to 400 units.
For the past year, Charming has been collecting data on sizing, which has led to a Right Fit by Lane Bryant program, which basically classifies customers into three body types for easier shopping and more flattering fits. The program launches in August with denim and career pants.At the end of October, Charming will relaunch the Lane Bryant catalogue, which is operated by Redcats through a licensing agreement that will expire this fall. Also, licensed Gitano casual merchandise in plus and misses' sportswear and footwear will arrive at Fashion Bug stores during the third quarter.
The company lowered earnings forecasts this week. For the second quarter ending Aug. 4, Charming projects diluted earnings per share of 18 to 20 cents, compared with a previous forecast of 25 to 27 cents. The projection is based on a 3 to 4 percent increase in the quarter's net sales, flat to low-single-digit declines in comparable-store sales, decreased traffic and increased markdowns last spring. For the year, the company projects earnings of 80 to 82 cents, compared with an earlier forecast of 86 to 90 cents.
"We are confident that we have sufficiently improved our merchandise assortments in each of our retail brands to be better positioned to achieve our sales and gross margin plans for the second half of this year," Bern said in a statement. "We are launching exciting new product and marketing initiatives this fall season at Lane Bryant and Fashion Bug."
Charming operates 2,409 stores, including Lane Bryant, Fashion Bug, Fashion Bug Plus and Catherines Plus. The group also has catalogues for accessories, footwear and gifts.
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