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Christopher & Banks rejects acquisition proposal of Aria
06
Jul '12
Christopher & Banks Corporation, a specialty women's apparel retailer, announced that the Board of Directors, after careful consideration, with the assistance of its outside financial and legal advisors, has rejected Aria Partners' unsolicited proposal to acquire all outstanding stock of the Company for $1.75 per share. The Board has also reaffirmed its commitment to its new management team's strategic plan, which has already begun to demonstrate signs of progress.

The Company's Board of Directors believes that the current merchandising and marketing strategies have brought stability to and energized the organization, and are expected to deliver improved sales, margin, and cash flow performance in the second half of fiscal 2012 and beyond.

While only a small portion of the current merchandise reflects the new strategy, the Company has begun to see a favorable response to new product, as well as to marketing initiatives aimed at driving traffic and sales. After careful review and consideration of the Aria Partners proposal, the Board, which is comprised entirely of independent directors, concluded that the proposal does not reflect the full, long-term value stockholders are expected to receive from continued focus on the current strategy. Therefore, the proposal is not in the best interests of Christopher & Banks and its stockholders.

Management's Merchandising and Marketing Initiatives Being Implemented

The four priorities previously laid out by the Company include:

1. Reducing the number of styles and SKUs offered in the fall 2012 deliveries and rebalancing the assortment toward more good and better product offerings with fewer best styles;

2. Offering an improved price/value proposition for fall with more attractive opening price points and reducing the variety of ticket prices;

3. Improving inventory flow beginning with the September assortment by reducing the number of major floor sets by half, while maintaining freshness with deliveries between sets; and

4. Developing an enhanced promotional strategy with more targeted, unique promotions and fewer storewide events.

The Board believes continued focus on the plan will yield improved sales, margins, and cash flow going forward and best serves the interests of its stockholders.

Stockholder Rights Plan and Management Retention Plan Adopted to Support the Turnaround Strategy Underway

In order to support management's efforts to stabilize the business and to provide sufficient time for the turnaround underway, the Board has adopted a stockholder rights plan. The plan is designed to deter coercive or unfair takeover tactics including the accumulation of shares in the open market or through private transactions and to prevent an acquirer from gaining control of the Company without offering a fair and adequate price to all of the Company's stockholders.

To implement the rights plan, the Board authorized the distribution of one right for each outstanding share of common stock of the Company to holders of record as of the close of business on July 16, 2012. The rights will expire on July 5, 2014.

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