CHARMING SHOPPES TO BUY LANE BRYANT
Byline: Jennifer Weitzman
NEW YORK — In a move that places it securely at the apex of the plus-size specialty market, Charming Shoppes has inked a definitive agreement to purchase Lane Bryant from The Limited Inc. for $335 million in cash and stock.
The deal, which confirms reports in these pages on June 27 that the Bensalem, Pa.-based Charming Shoppes was the leading contender to acquire Lane Bryant, is set to close during the third quarter. It would include $280 million in cash with the remaining $55 million coming in the form of about 8 percent of CS’s common stock.
Dorrit J. Bern, chairman and chief executive of CS, told WWD the acquisition “separates us as an enormous corporation of niche plus-sized businesses, with each segment serving a specific consumer profile.”
The cash portion of the deal will be financed through existing cash and a new $375 million credit facility secured by Charming Shoppes’ inventory and other assets. Closing is contingent upon regulatory approval and customary closing conditions.
The purchase gives Charming Shoppes a greater mall presence, extends customer reach to include younger, fashion-oriented shoppers and expands its overall geographic presence, mostly in the West, South and Southeast.
Lane Byrant rang up $930 million in sales last year and currently operates 653 units, mostly in malls. The chain will continue to operate as a stand alone operation and should complement Charming Shoppes 1,774 stores, which exist primarily in strip centers, under names including Fashion Bug and Catherine’s Plus Sizes. Charming Shoppes had sales of $1.6 billion in fiscal 2001. Combined, the stores are expected to generate sales of $2.5 billion this year, $947 million from Lane Byrant alone.
According to the NPD American Shoppers Panel, large sizes account for about 27 percent of women’s apparel purchases and grew 11.3 percent during 2000. Lane Bryant and the plus-size segment of CS’s business, which excludes the regular-size portion of Fashion Bug, each commanded about 19 percent of the plus-size specialty apparel market.