Charming Shoppes cuts jobs, limits store openings
BENSALEM, Pa. Charming Shoppes today announced that it has eliminated 13% of its corporate and field management positions as part of additional initiatives being taken in response to the continuing weak retail and economic environment. The cuts affected approximately 150 positions, the company reported.
In addition to staff reductions, Charming Shoppes said that it has also cut its fiscal 2009 budget by more than $40 million, mainly by limiting the number of planned store openings for 2009. The company also plans to close 150 stores.
Charming Shoppes has also closed its Petite Sophisticate concept.
The company anticipates that the execution of the initiatives announced today will result in approximately $20 million of annualized pre-tax savings, primarily in the areas of non-store payroll and annualized losses related to its planned 150 store closings. As a result of the initiatives announced today, the company expects to recognize one-time non- recurring pre-tax charges of approximately $17.3 million ($10.8 million after tax, or 9 cents per diluted share) related to severance, benefits and lease termination costs, including $7 million ($4.4 million after tax) of non-cash pre-tax charges related to the write-down of store assets. On an after-tax basis, the impact of the one-time non-recurring charges is expected to be slightly cash-flow negative.
Dorrit Bern, chairman, ceo and president of Charming Shoppes, stated, "We remain confident in and committed to our long- term multi-brand, multi-channel strategy. In the near-term, however, and similar to difficult actions we have taken in past retail and economic downturns, we are taking important steps to ensure a greater focus on our core businesses and on improving profitability. As we have done in the past, we will continue to examine additional opportunities to further drive sales, profitability and shareholder value."