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Christopher & Banks plans to close Acorn division
01 Aug '08
2 min read
Christopher & Banks Corporation announced that, after an internal review, it plans to exit its Acorn division business by December 31, 2008.
A recent evaluation of the Company's Acorn division concluded that the concept has not demonstrated the potential to deliver an acceptable long-term return on the Company's investment. As a result, on July 30, 2008, the Board of Directors authorized plans to close the division's 36 Acorn stores.
Going forward, the Company's focus will be on its two core brands, Christopher & Banks and C.J. Banks, as well as on supporting other growth initiatives that it believes have a greater potential of creating shareholder value.
Lorna Nagler, Chief Executive Officer, commented, “We conducted an extensive review of our Acorn division with the objective of analyzing its viability and future profitability.
With only 36 stores and an operating loss in fiscal 2008 of more than $4 million, including store and corporate administrative expenses, and a charge of more than $10 million for long-lived asset and goodwill impairment, our Board and senior management concluded that further investment would not be in the best interests of the Company and its shareholders.”
“Store locations, brand identity, store economics and the current retail and economic environment were factors that contributed to the less than satisfactory performance of the division. Exiting this concept now allows us to focus our efforts on our two core brands and other strategic initiatives.
We made what is a difficult, but nonetheless what we believe to be the right, decision. However, I want to thank the talented Acorn division team for their hard work and efforts over the past several years.”
The Company will close 36 Acorn stores in 14 states. The closures will impact approximately 80 full-time and 200 part-time positions, or approximately 4 percent of the Company's total workforce.
The Company anticipates pre-tax expenses associated with the closing of the stores to range from approximately $7 million to $10 million. On an after-tax basis, the charges are expected to range from approximately $4.2 million to $6.0 million, or $0.12 to $0.17 per diluted share, with charges to be taken in the second, third and fourth quarters of fiscal 2009.
The expenses primarily consist of charges attributable to estimated lease termination liabilities, non-cash asset impairment charges, and severance and retention costs associated with the closing of the Acorn division.
A recent evaluation of the Company's Acorn division concluded that the concept has not demonstrated the potential to deliver an acceptable long-term return on the Company's investment. As a result, on July 30, 2008, the Board of Directors authorized plans to close the division's 36 Acorn stores.
Going forward, the Company's focus will be on its two core brands, Christopher & Banks and C.J. Banks, as well as on supporting other growth initiatives that it believes have a greater potential of creating shareholder value.
Lorna Nagler, Chief Executive Officer, commented, “We conducted an extensive review of our Acorn division with the objective of analyzing its viability and future profitability.
With only 36 stores and an operating loss in fiscal 2008 of more than $4 million, including store and corporate administrative expenses, and a charge of more than $10 million for long-lived asset and goodwill impairment, our Board and senior management concluded that further investment would not be in the best interests of the Company and its shareholders.”
“Store locations, brand identity, store economics and the current retail and economic environment were factors that contributed to the less than satisfactory performance of the division. Exiting this concept now allows us to focus our efforts on our two core brands and other strategic initiatives.
We made what is a difficult, but nonetheless what we believe to be the right, decision. However, I want to thank the talented Acorn division team for their hard work and efforts over the past several years.”
The Company will close 36 Acorn stores in 14 states. The closures will impact approximately 80 full-time and 200 part-time positions, or approximately 4 percent of the Company's total workforce.
The Company anticipates pre-tax expenses associated with the closing of the stores to range from approximately $7 million to $10 million. On an after-tax basis, the charges are expected to range from approximately $4.2 million to $6.0 million, or $0.12 to $0.17 per diluted share, with charges to be taken in the second, third and fourth quarters of fiscal 2009.
The expenses primarily consist of charges attributable to estimated lease termination liabilities, non-cash asset impairment charges, and severance and retention costs associated with the closing of the Acorn division.
Christopher & Banks Corporation
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