ANALYST BETTERS OUTLOOK FOR CHARMING SHOPPES
NEW YORK — Charming Shoppes Inc., moving forward with a restructuring effort that includes closing nearly 300 unprofitable stores and revamping its merchandise strategy, received a boost Wednesday when one Wall Street investment firm improved its outlook for the chain to “outperform” from “hold.”
The rosy research report from Schroder Wertheim & Co. analyst Richard Jaffe sent Charming’s stock up 1/2 to 2 15/16 in heavy over-the-counter trading.
The Bensalem, Pa.-based operator of 1,423 Fashion Bug and Fashion Bug Plus stores had raised concern with some credit executives earlier this year when comparable-store sales sagged, margins thinned and the chain had trouble inking a new financing deal.
While the Dec. 1 announcement that Charming had signed a $157 million asset-backed financing deal relieved much of the pressure, and a new executive team quickly reworked the merchandise mix, several credit executives maintained that a Charming Shoppes turnaround would take another six months.
Jaffe said he saw positive movement in Charming.
“With financing in place, and a strong merchant team surrounding Dorrit Bern [chief executive officer since Oct. 1], we are optimistic that [Bern] can have a positive influence on this business by late spring 1996,” Jaffe said in the research report.
In another development, Ivan M. Szeftel resigned Wednesday as Charming’s chief financial officer and executive vice president of finance, effective Dec. 22. He will remain a consultant to the company through Feb. 9.
Eric M. Specter, vice president and corporate controller, will assume the role of chief financial officer, the company said.
Also, Mordechay Kafry, executive vice president of merchandise procurement, resigned from the board of directors but will continue in his current responsibilities until March 1, the company said. Charming Shoppes said it expects to name an executive vice president of merchandise procurement shortly after the New Year.
— Fairchild News Service