Charming Shoppes Trims Loss In Fourth Quarter
Charming Shoppes Inc. generated $631.9 million in net sales during fourth-quarter 2008, down from $731.8 million in fourth-quarter 2007. The company trimmed its net loss between the two quarters from $124.4 million a year ago to $108.5 million. The quarter ended Jan. 31.
Charming Shoppes operates a variety of apparel chains, including Lane Bryant, Fashion Bug, Catherine’s Plus Sizes and Petite Sophisticate Outlet.
During the quarter, the company took a variety of writedowns, including those related to goodwill impairment, and those stemming from the company closing its Lane Bryant Woman catalog and Figure Magazine.
“Our operating results were in line with our expectations, as we were able to offset lower-than-planned sales through improved merchandise margins at our retail brands,” said Alan Rosskamm, the company’s interim CEO, in a statement.
Rosskamm continued, “We are beginning to experience some stability in our retail merchandise margins, with improvement at Lane Bryant and Fashion Bug, as a result of our stringent focus on inventory management. We were also successful in reducing expenses by 24 million during the quarter, as compared to the fourth quarter in the previous year. Signaling that our cost-reduction initiatives are being executed and are beginning to yield meaningful results.”
The Skeptic’s Take: Charming Shoppes can talk about its operating results being in line with its expectations all it wants. The fact is that in fourth-quarter 2008, the cost of its goods sold, buying, catalog and occupancy, when added to its selling, general and administrative expenses, were 106.1% of its net sales – and that’s before one factors in goodwill impairment, restructuring and other charges. During fourth-quarter 2007, these expenses were 103.5% of sales. It could be that this company makes its profits during the first three quarters, but this quarter includes the holiday buying season.
