Restructuring charges and price promotions drove Charming Shoppes Inc. into the red in the fourth quarter.
This story first appeared in the March 20, 2008 issue of WWD. Subscribe Today.
The corporate parent of Lane Bryant, Fashion Bug and Catherines Plus Sizes, which is under pressure from activist investors, also forecast a loss of 6 to 8 cents a diluted share in the first quarter, compared with earnings of 20 cents a year ago.
For the three months ended Feb. 2, the Bensalem, Pa.-based retailer reported a loss of $128.7 million, or $1.10 a diluted share, excluding a one-time gain from an eminent domain settlement, compared with earnings of $24.9 million, or 19 cents, in the same year-ago quarter.
Excluding one-time restructuring charges and other items, Charming Shoppes posted a loss of 20 cents a diluted share.
Sales for the three months fell 10.2 percent to $784.9 million from $874 million, as total same-store sales dropped 9 percent.
For the full year, the firm lost $87.7 million, or 72 cents a diluted share, excluding the one-time gain, compared with earnings of $108.9 million, or 81 cents, a year ago. Sales dipped 1.9 percent to $3.01 billion from $3.07 billion.
“The combination of changing customer preferences from our merchandise offerings and the very difficult economy in which we are operating led to accelerated promotional activity,” said chairman and chief executive officer Dorrit Bern.
Last year, Charming Shoppes closed 150 stores, cut 150 management positions, repurchased $253 million of its own shares and relocated Catherines Plus Sizes home office to Bensalem from Memphis.
Charming Shoppes filed suit this month against two hedge fund investors, the Crescendo Partners and Myca Partners, alleging they were trying to put three directors on the board to influence decisions in their favor.