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Deb Shops Names CEO

Deb Shops Inc., the nationwide junior chain, has named 30-year retail veteran Diane M. Paccione as chief executive officer.

Deb Shops Inc., the nationwide junior chain, has named 30-year retail veteran Diane M. Paccione as chief executive officer.

This story first appeared in the February 6, 2008 issue of WWD.  Subscribe Today.

Paccione succeeds Marvin Rounick, who has served in a consultant capacity since October, when Lee Equity Partners acquired Deb Shops for about $395 million from a group of insiders, including Rounick and other senior executives.

“It’s the destination for the junior shopper,” Paccione said Tuesday after visiting two Deb Shops stores. “It’s trend-right, and we have an opportunity to grow.”

The company’s business hasn’t grown much recently. The store count has risen to 336 from 327 in the past five years, a period in which 60 units opened and about 50 closed. Although Deb Shops was a public company, the majority of shares were held by a small number of insiders, so the retailer tended to operate with the mind-set of a private firm. Paccione will be challenged to grow the business profitably and raise its profile. She described the business as one of retailing’s “best-kept secrets.”

Asked how the junior market has been faring, she said: “It’s been one of the more consistent businesses,” despite the nation’s sagging economy. “If parents need to make a choice, they will buy for their kids first.” She said the introduction of low-rise denim in 2000 as well as baby-doll tunics have been volume drivers in juniors.

Paccione said the growth plan for the chain was a work in progress, but added there is opportunity to increase the store count in states where stores are spread out. The chain operates in 43 states. A new prototype also is under discussion, she said.

Asked about more executive changes, Paccione replied: “Current management will stay intact.”

Paccione had been working at Charming Shoppes Inc., serving as president of the Fashion Bug, Catherines, Petite Sophisticate Outlets and Lane Bryant Outlets divisions. She began her retail career at Bloomingdale’s before joining May Department Stores Co., where she was vice president and divisional merchandise manager. Paccione later joined Sears, Roebuck and Co. as vice president and general merchandise manager.

Deb Shops last year was put in the spotlight when Allen Questrom, the former ceo of Federated Department Stores, J.C. Penney and Barneys New York, became the chain’s non-executive chairman. Paccione will join Questrom on the board and will work with him on projects. Questrom is a senior adviser to Lee Equity Partners.

“Diane Paccione has a long track record of success in leading teams in retail apparel. She brings a tremendous amount of leadership and merchandising experience to the talented management team at Deb Shops,” Questrom said.

Deb Shops wanted a merchant knowledgeable about juniors who had exposure to plus sizes. “She was the first choice from the start,” said Brian Meany, managing director of Herbert Mines Associates, which handled the ceo search. “There was a comfort level with her experience, and a chemistry with Allen and the board.”

The 75-year-old Philadelphia-based Deb Shops sells apparel, shoes and accessories for juniors in regular and plus sizes, and operates stores under the Deb and Tops ‘n Bottoms names. The company has a strong balance sheet, is known for its high-low pricing and recently boosted its offering of plus-size merchandise.

Questrom said last year that Deb Shops, which is concentrated in the Northeast, has particularly good growth potential in Florida, Texas and California, where the brand has either a minor presence or none. In addition, Questrom noted that a high percentage of those who shop Deb Shops are Hispanic, the fastest-growing demographic group in the U.S.