Charming Shoppes reports Q4 loss

Bensalem, Pa. Charming Shoppes on Wednesday posted a narrower-than-expected fourth-quarter loss, but said it will eliminate some of its non-core assets, including its Web site shoetrader.com, as part of its cost-cutting initiatives. Looking ahead, the company said it will likely report a loss in its first quarter due to an expected double-digit decline in same-store sales.

For the quarter ended Jan. 31, the company, which operates Lane Bryant, Fashion Bug and Catherines, posted a net loss of $108.5 million, compared with a net loss of $124.4 million a year earlier. Revenue fell 14% to $631.9 million.

Same-store sales, including Lane Bryant and Fashion Bug, fell 15% during the quarter.

"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, chairman and CEO. “We also were 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.”

For the year, the company reported a loss of $244.2 million, compared with a loss of $83.4 million in the prior year. Revenue fell to $2.47 billion, from $2.72 billion.

For its current fiscal year, Charming Shoppes has planned net capital expenditures of approximately $24 million, a reduction of 50% below the $48 million it allocated last year.

The company's cost-cutting initiatives also include the closure of Figure Magazine, effective immediately, and the closing of the shoetrader.com Web site in the second half of the year.

Charming Shoppes said it expects to realize cost savings of about $125 million during the current fiscal year.

Planned store activity for the year currently includes approximately six new stores at the company's Lane Bryant brand; 12 relocations, primarily at the Lane Bryant brand; and as previously announced, approximately 100 store closings.

In other news, Charming Shoppes announced its $50 million credit-card securitization facility has been renewed through March 30, 2010. The company has $655 million available to fund credit-card receivables, and as of Jan. 31 had $536 million in receivables outstanding, which it said would likely be the peak for the new fiscal year.