Byline: Arnold J. Karr / With contributions from James Fallon

NEW YORK — Charming Shoppes and Monsoon PLC have initiated a transatlantic embrace that will bring the British fashion retailer’s Monsoon and Accessorize stores to the U.S.
The Bensalem, Pa.-based operator of more than 1,750 women’s specialty stores, including Fashion Bug and Catherine’s Plus Sizes, has formed a joint venture with Monsoon that, in its first full year of operation, should bring as many as 20 Monsoon and Accessorize stores to American locations. Monsoon currently operates one U.S. store outside Boston, and the majority of the first U.S. stores are expected to be located in the Northeast. Sites in the Midwest are also being considered.
Charming Shoppes plans to invest up to $4 million, or 80 percent of the initial capital in the venture during the current fiscal year and an additional $4 million over the following three years. The joint venture will operate as a separate division of Charming Shoppes. “We’re truly excited to be bringing a retail concept to the U.S. that makes people walk in and say, ‘Wow,”‘ Dorrit Bern, Charming Shoppes’ chairman and chief executive, told WWD Thursday. “There aren’t enough stores that are elevating the level of excitement in apparel. I tend to think that, if we stick to the very casual khaki cycle, there will be fewer reasons for customers to buy and shop.”
While she said that Monsoon will benefit from Charming Shoppes’ operational expertise — “we know how to negotiate leases, open and operate stores” — she feels that that the younger, more fashion-forward Monsoon operation will fully complement the somewhat more mature, more price-oriented Fashion Bug stores.
The real estate profiles are also complementary: Fashion Bug’s 1,200 units occupy 8,000 to 9,000 square-feet of space, primarily in strip malls, while Monsoon’s are earmarked for “A” and “B” major mall sites of about 2,500 square feet. Monsoon will also be a natural for newer upscale strip malls, she noted.
Accessorize stores occupy smaller spaces, typically about 800 square feet, but all Monsoon units will include Accessorize brand merchandise and many will have separate identification of the nameplate besides. Accessorize could also be adapted for smaller shop concepts, Bern said.
Charming Shoppes wouldn’t specify projected store openings beyond the current year, but Bern said the numbers would be “significant.” The company recently stated that it plans to open an additional 1,000 units over the next five years. That figure doesn’t include the Monsoon openings. “Those are a separate leg of our expansion,” a company spokeswoman stated.
Donna Schmid, formerly general merchandising manager of Federated’s Seattle-based Bon Marche division, has joined the company as director of operations, reporting to Bern. Most recently, Schmid was senior project manager of The Retail Group, a brand strategy, design and marketing consulting firm based in Seattle.
Charming Shoppes had sales of $1.2 billion and earnings of $348.1 million last year as it significantly boosted its presence in the large-size market through the acquisitions of Modern Woman and Catherine’s Plus Sizes. About 100 of the 500 units acquired have since been established as Added Dimensions, an ethnic specialty chain.
Large sizes also account for about 40 percent of the sales of Fashion Bug, giving Charming Shoppes approximately a 19 percent share of the large-size women’s market in the U.S., neck-and-neck with Limited’s large-size Lane Bryant operation.
In the first six months of the current year, Charming Shoppes’ earnings jumped 25.4 percent to $35.4 million while sales, bolstered by the acquisitions, climbed 41.8 percent to $809.6 million. The company’s same-store sales were up 4 percent in September and were flat in August.
The British company currently operates 125 Monsoon stores and 120 Accessorize units in the U.K., as well as 12 Monsoon and Accessorize stores in continental Europe, the Mideast, Asia and Australia. Monsoon had a 16.5 percent increase in net profit to $22.1 million on a 17 percent increase in sales to $221.1 million for the year ended May 27. This compares with after-tax profits of $19 million on sales of $191.1 million a year earlier.
The company has operated a Monsoon unit in the Natick Mall outside Boston since 1994, Andrew May, Monsoon’s finance director, said in a telephone interview. While the store has been successful, the company’s further expansion in the U.S. was always delayed by other priorities.
“Then we decided not to do things ourselves in overseas markets in the future, and so decided to find a joint-venture partner,” May said, adding the search started about six months ago.
Bern noted that Monsoon had received a great deal of attention from U.S. mall developers looking for distinct fashion retailers, especially those with a European point of view, to infuse their shopping centers with more excitement. “They’ve gotten even more attention since going public last year,” she said.
She pointed out that, although the companies are focusing on a steady, studied expansion in the U.S., growth plans could accelerate if attractive real estate opportunities became available.
“We have the systems in place, and the balance sheet, so that we could move quickly if a large group of leases were to be presented to us,” she said.
May said Monsoon’s U.S. merchandise will initially be the same as in the U.K., although the company might eventually adapt the Monsoon line to account for any differences in taste: “We may, for example, eventually do more pants because those are more in demand in the U.S. But only when volumes reach a large enough level to justify it.”
Walter Loeb of Loeb Associates viewed the joint venture as another in a series of positive moves for Charming Shoppes.
“They’ve really hit the mark with their acquisitions and recent initiatives,” said the analyst. “In large sizes, they’re very competitive with Lane Bryant and their new stores are outstanding in design and execution. Added Dimension has given them just that, and this takes their fashion profile to another level.”
The Monsoon joint venture will reunite Bern and Schmid, who were previously associated at Bon Marche. Bern later went to Sears, where she was group vice president of women’s wear and home furnishings, before being named ceo of Charming Shoppes in 1995.
In fact, during her days at Sears and before, she paid Monsoon what many consider the ultimate compliment.
“We used to run to Britain, buy things from the Monsoon stores and then head to Asia to have them made,” she revealed.

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