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Mired in the fierce pullback in spending by its core Baby Boomer customer, Christopher & Banks Corp. is developing a concept store that could become the new face of the retailer.
This story first appeared in the June 30, 2009 issue of WWD. Subscribe Today.
While many of its competitors scale back on plus-size lines, the Minneapolis-based retailer will introduce a concept store that will house apparel from Christopher & Banks and its plus-size concept, C.J. Banks, under the same roof. The store, which will be about 5,000 square feet, larger than the retailer’s typical 3,200-square-foot footprint, will have two separate entrances marked C.J. Banks and Christopher & Banks.
The first concept store, which is set to launch at the end of July at an existing outdoor lifestyle mall in Scranton, Pa., will also carry petites.
“We see other retailers moving away from this [plus-size] customer,” Lorna Nagler, president and chief executive officer, told WWD. “As a company, we are very focused on taking care of the plus-14 size customer. We see it as a strategic move.”
Nagler said the idea came from customers who not only wanted to shop with friends or family, but also wanted the ability to buy both brands.
“There’s a lot of crossover with this customer,” she said, explaining some women may fit into tops from the core misses’ brand and bottoms from the plus-size brand.
With 269 stores, “C.J. Banks is the brand we will grow,” Nagler said. “We hope this new concept is a prototype for all of our stores.” The flagship division operates 545 units, about 30 of which will begin carrying elements of the C.J. Banks brand.
In order to build the business, Nagler said the company will be “opportunistic with vacancies” and will try testing other concept stores in new markets.
Nagler acknowledged the company’s assortment suffered from a “lack of newness,” but said the retailer would be adding colors and patterns to its assortments. The clothes will focus on “comfort, facility” and the “casual lifestyle,” she said.
Nagler noted that, with financial markets in decline, the more mature woman has been making mostly “selective purchases.”
“It’s still erratic,” she said of the misses’ retail sector. “I don’t think anyone is confident. We are working on what we can control.”
Exerting that control, especially over inventory and other expense items, helped the company surprise analysts last week with a first-quarter profit that, while down 85.1 percent on top of a 22.5 percent decline in sales, was better than the loss expected.
For the quarter ended May 30, the retailer recorded net income of $1.7 million, or 5 cents a diluted share, compared with net income of $11.3 million, or 32 cents a share, in the year-ago period. Sales for the quarter slid to $120.4 million from $155.4 million in 2008, while same-store sales fell 24 percent. Analysts polled by Yahoo Finance anticipated a loss of 5 cents on revenue of $121.7 million.
Selling, general and administrative expenses declined 17 percent to $36.1 million, while inventories per store at quarter’s end decreased 22 percent, versus a year earlier.
According to UBS retail analyst Roxanne Meyer, who gives the company a “sell” rating, “Christopher & Banks has been playing defense with inventory management and SG&A cuts, but we think the top line needs to show improvement in the second half to support the current multiple.”