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Charming Shoppes plans to divest Fashion Bug biz
06 Dec '11
5 min read
"Our vision for the Lane Bryant brand is to become the premier brand for women's fashion plus apparel," said Romano. "We expect to achieve this through a number of initiatives. Our plans for the growth of Lane Bryant include offering her fashionable, on-trend, lifestyle collections, enhancing Cacique intimate apparel brand awareness and merchandise offerings, pursuing innovative digital sales initiatives like our recently launched "Fashion Genius", and opening new and relocating existing stores.
"Over the next few years, we expect to expand the Lane Bryant footprint to approximately 900 stores, resulting in approximately 750 full-line Lane Bryant stores and 150 Lane Bryant Outlet locations. These plans include approximately 125 new locations and 125 relocations from malls into power strip and lifestyle centers with stronger operating metrics, while closing approximately 50 stores on their natural lease expirations. Currently, the mix of Lane Bryant stores in strip centers to malls is 55% to 45%, and we plan to improve this mix to 80% to 20% over the next few years."
"The operating metrics are compelling and supportive of expanded profitability, as Lane Bryant's sales are projected to be generally 10% to 20% higher after a store is relocated from a mall to a power or lifestyle center, and our occupancy expense is projected to be generally 30% to 40% lower in these centers than in malls. The achievement of these metrics would result in improved sales productivity in excess of $200 per square foot, driving a Lane Bryant store EBITDA margin into the high teens."
Commenting on the quarter, Romano said, "Our seasonal fashion inventory assortments were well received by our customers. We improved average unit retails and average dollar sales compared to the prior year period and drove higher gross margins across all brands. Our disciplined inventory management resulted in 8% lower inventory at cost on a comparable store basis at the end of the quarter as compared to the prior year period. However, as we noted during our second quarter call, our July sales were negatively impacted by reduced levels of summer clearance inventory and this trend continued into August."
"Our business plans for the quarter included significantly reduced levels of clearance and slower turning year round merchandise. We continued to execute against our plan for tightly controlled inventories to drive higher gross margins. Although the reduced clearance inventory negatively impacted sales, it contributed to our 210 basis point increase in the gross margin. We are aggressively seeking the proper balance of full price, promotional and clearance inventory in order to maximize gross profit dollars."
Click here to read more details:
"Over the next few years, we expect to expand the Lane Bryant footprint to approximately 900 stores, resulting in approximately 750 full-line Lane Bryant stores and 150 Lane Bryant Outlet locations. These plans include approximately 125 new locations and 125 relocations from malls into power strip and lifestyle centers with stronger operating metrics, while closing approximately 50 stores on their natural lease expirations. Currently, the mix of Lane Bryant stores in strip centers to malls is 55% to 45%, and we plan to improve this mix to 80% to 20% over the next few years."
"The operating metrics are compelling and supportive of expanded profitability, as Lane Bryant's sales are projected to be generally 10% to 20% higher after a store is relocated from a mall to a power or lifestyle center, and our occupancy expense is projected to be generally 30% to 40% lower in these centers than in malls. The achievement of these metrics would result in improved sales productivity in excess of $200 per square foot, driving a Lane Bryant store EBITDA margin into the high teens."
Commenting on the quarter, Romano said, "Our seasonal fashion inventory assortments were well received by our customers. We improved average unit retails and average dollar sales compared to the prior year period and drove higher gross margins across all brands. Our disciplined inventory management resulted in 8% lower inventory at cost on a comparable store basis at the end of the quarter as compared to the prior year period. However, as we noted during our second quarter call, our July sales were negatively impacted by reduced levels of summer clearance inventory and this trend continued into August."
"Our business plans for the quarter included significantly reduced levels of clearance and slower turning year round merchandise. We continued to execute against our plan for tightly controlled inventories to drive higher gross margins. Although the reduced clearance inventory negatively impacted sales, it contributed to our 210 basis point increase in the gross margin. We are aggressively seeking the proper balance of full price, promotional and clearance inventory in order to maximize gross profit dollars."
Click here to read more details:
Charming Shoppes Inc
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