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DailyFinance  Jan 14  Comment 
BETHESDA, MD -- (Marketwired) -- 01/14/14 -- Bethesda, Maryland, is a dynamic city filled with great restaurants, cool night clubs, and charming shops that's perfect for a romantic getaway. Spend Valentine's Day at the Bethesda Marriott, a...
Benzinga  Jun 27  Comment 
In a report published Thursday, J.P. Morgan analyst Brian J. Tunick reiterated a Neutral rating on Ascena Retail Group (NASDAQ: ASNA), but lowered the price target from $19.00 to $18.00. In the report, J.P. Morgan noted, “With the CHRS...
MarketWatch  Mar 5  Comment 
Ascena Retail Group Inc. , parent of Dress Barn and Lane Bryant clothing chains for women, jumped 11% on Tuesday after it reported a better-than-expected fiscal second-quarter profit late Monday. The company, which also owns Justice kids' clothing...
Benzinga  Jan 2  Comment 
In a report published Wednesday, Citigroup downgraded its rating on Ascena Retail Group (NASDAQ: ASNA) from Buy to Neutral, and lowered its price target from $25.00 to $20.00. Citigroup noted, “We rate ASNA Buy. We believe ASNA's competitive...
Benzinga  Sep 13  Comment 
Citigroup initiated coverage on Ascena Retail Group (NASDAQ: ASNA) with a Buy rating and a price target of $25. Citigroup commented, "ASNA is a new model for retailing and we see +M-teens growth and value creation on sharp prices, a...
New York Times  Aug 9  Comment 
The campaign by MODCo, in response to a drop in plus-size sales, features print ads, a revamped Web site and Facebook pages, new logos and other initiatives.
Benzinga  Jun 28  Comment 
Charming Shoppes, Inc. ("Charming") announced that it has commenced a tender offer (the "Tender Offer") to accept for purchase any or all of its outstanding 1.125% Senior Convertible Notes due 2014 (the "Notes") on July 27, 2012 (the "Fundamental...
StreetInsider.com  Jun 27  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Management+Changes/WPCS+Int%27l+%28WPCS%29+Names+Charming+Shoppes+%28CHRS%29+Exec+Benton+to+Board/7544854.html for the full story.
Forbes  Jun 8  Comment 
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the SPDR S&P Retail ETF (AMEX: XRT) where we have detected an approximate $175.6 million dollar inflow -- that's a 21.9%...




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Charming Shoppes (NASDAQ: CHRS) is the parent company of the Lane Bryant, Lane Bryant Outlet, Fashion Bug and Catherine's Plus Sizes clothing companies, as well Crosstown Traders, a company that markets women's clothing and accessories. All of Charming Shoppes' businesses cater to plus-size women, which means it is in a good position to take advantage of the large American plus-size market - fully 62% of all American women are overweight.[1] The company is attempting to cope with the decrease in consumer spending by cutting costs, partly by eliminating 150 management positions and closing one of its divisions, the Petite Sophisticate Outlet.[2]

Charming Shoppes is also one of many retailers that extends a line of credit to its consumers, which would ordinarily be a disadvantage considering the state of the American economy, in which credit card debt is increasing due to inability to secure home equity loans. The average debt of the Charming Shoppes' consumer, however, is low enough that repayment is more viable than with peer companies; the fact that Charming Shoppes credit cards are restricted to its own stores, as opposed to other retailers who have their own unrestricted lines of credit for its customers, helps keep the average debt of each consumer low.

Company Overview

Business Financials

In 2010 (CHRS's fiscal year ends on January 31 of each year), CHRS posted total revenues of $2.06 billion. This was a significant decline from its 2009 revenues of $2.47 billion. Despite the decrease in revenues, CHRS was still able to cut its net loss in 2010. Between 2009 and 2010, CHRS decreased its net loss from $244 million in 2009 to $78 million.

Business Segments

Charming Shoppes, Inc. is divided into a number of segments:

Lane Bryant

Lane Bryant is a plus-size retailer offering sizes 14-28 under the brand names Lane Bryant, Cacique, and Venezia. Its demographic consists of middle-class women age 35 to 55. In Fiscal Year 2006 Lane Bryant introduced an intimate apparel store, which was placed adjacent to the Lane Bryant clothing store. These stores are operated in this side-by-side format. Lane Bryant sells its apparel through its 795 stores (located in 46 U.S. states) as well as its website, which averaged over 2.4 million unique users per month in fiscal year 2008.

Lane Bryant Outlet

Lane Bryant Outlet is the only national outlet chain that sells plus-size apparel exclusively.

Fashion Bug

This segment offers plus-size and junior's apparel for customers between 20 and 49 years old with low to medium income. Fashion Bug operates 989 stores in 44 states, and its website averaged 900,000 unique visitors per month.

Catherines Plus Sizes

Catherines Plus Sizes offers an extended range of sizes (over size 28) and caters to consumers between 40 and 65 years of age with moderate income. Catherines sells its merchandise through 468 stores located in 44 states, as well as its website, which averaged over 463,000 unique visitors per month.[3]

Petite Sophisticate Outlet

This segment's storefronts are being closed or converted to Outlets for some of Charming Shoppes' other brands starting in late 2009 with completion scheduled for mid-2010. Petite Sophisticate's Website is already shutdown.

Crosstown Traders

This segment was sold by Charming Shoppes to Orchard Brands in a $35million cash purchase which closed in Sept. of 2008. After extending some services to support operations during transition, Charming Shoppes no longer had any dealings with Crosstown Traders or Orchard Brands by early 2010.

Trends and Forces

Plus-Size Market Means Good News for Charming Shoppes

According to Obesity in America, approximately 62% of American women are considered overweight, meaning that they compose a large part of the plus-size market.[4] Charming Shoppes, whose stores (with the exception of Petite Sophisticate) provide clothing to the plus-size demographic, is in a good position to take advantage of this market segment. In addition, obesity is most prevalent in low-income neighborhoods[5], once again a demographic that Charming Shoppes serves. The trend of growing rates of obesity, especially within low income neighborhoods means that the market for Charming Shoppes' goods is expanding.

Charming Shoppes Insulated Against Credit Crisis

With home equity dried up, many consumers have started to rack up increasing amounts of credit card debt. As credit card balances rise, so does the probability of consumers defaulting on them. The increased delinquency rate is bad news not only for credit card companies but for those retailers, such as Lane Bryant, that extend lines of credit to its consumers. Lane Bryant has $600 million in outstanding credit, which is an average of $260 or $270 per customer, and the minimum monthly repayments average $15 to $20 per month.[6] Lane Bryant has an advantage over other retailers that extend lines of credit to its consumers due to the fact that Lane Bryant credit cards are usable only in Lane Bryant stores, whereas other retailers collaborate with Visa or MasterCard, making cards which can be used anywhere. The unrestricted use of these cards leads to larger balances, potentially reaching tens of thousands of dollars.[7] The smaller size of average customer debt on the Lane Bryant credit makes it more likely that debt will be repaid.

Competition

Charming Shoppes' faces competition from a number of retailers. These include Redcats, Dress Barn (DBRN), and TJX Companies (TJX).

Redcats is the number 3 home shopping company worldwide in fashion and home decoration. It has over 60 merchant websites, over 30 catalogues, and 600 stores internationally. 91.8% of its revenues come from catalog and internet orders. Redcats operates 37 brands, encompassing men's, women's, and children's apparel, furniture, home appliances, and discount retailers.[8]

Dress Barn sells clothing and accessories to low-to-middle class women. Both the company’s divisions, Dress Barn and Maurices, also offer plus-size apparel. TJX Companies is the parent company of some of the largest discount retailers in the world, such as T.J. Maxx, Marshall's, and A.J. Wright.

References

  1. Obesity in America-Obesity Demographics.
  2. Charming Shoppes F4Q08 (Quarter End 02/03/08) Earnings Call Transcript. Seeking Alpha.
  3. CHRS 2007 10-K. Item 1, Page 2.
  4. Obesity in America-Obesity Demographics.
  5. "Obesity disproportionately burdens low-income, ethnic minority populations." December 2, 2004. News-Medical.Net
  6. Charming Shoppes F4Q08 (Quarter End 02/03/08) Earnings Call Transcript. Seeking Alpha.
  7. Charming Shoppes F4Q08 (Quarter End 02/03/08) Earnings Call Transcript. Seeking Alpha.
  8. Redcats-Brands.
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