VOL. 123 | NO. 26 | Thursday, February 7, 2008
Catherine's HQ To Leave Memphis
By Rosalind Guy
Catherine's Plus Size Brand Headquarters is leaving Memphis and becoming a part of its parent company's Bensalem, Pa., headquarters.
The move is part of Charming Shoppes Inc.'s plans to close more than 150 unprofitable stores and cut up to 200 jobs. Charming Shoppes is the parent company of Catherine's, Lane Bryant, Fashion Bug and Fashion Bug Plus.
It's unclear when the relocation will take place, but company officials said 50 jobs would be lost when the company moves Catherine's headquarters to Bensalem. Another 150 jobs or 13 percent of corporate and field management positions also were slated to be cut as of Jan. 31, officials said in a statement.
Calls to Charming Shoppes corporate headquarters were referred to the Memphis headquarters. Calls to Catherine's Memphis headquarters were not returned by press time.
"As part of our ongoing review of our operations, especially in this challenging environment, we are taking a number of additional actions to improve profitability and enhance shareholder value," Dorrit J. Bern, chairman, chief executive officer and president of Charming Shoppes Inc., said in a statement. "These were difficult but necessary actions, and we are confident that by streamlining our operations, realigning our field management structure and reducing the number of positions at our corporate headquarters we will further strengthen Charming Shoppes' operational and financial performance."
Charming Shoppes also plans to pare back the number of store openings this year to reduce its capital budget by 30 percent, or $40 million.
Like other retailiers, Charming Shoppes has been hurt by a slowdown in consumer spending as food and gas prices remain high, the real estate market remains in turmoil and credit problems continue.
The number of new store openings will fall by 50 percent this year, Bern said.
The 150 store closings this year will include 100 Fashion Bug locations. The targeted stores, spread throughout the country, were generating a pretax loss of $6 million a year.
The retailer doesn't yet know how many employees might be let go at the closed stores, since it hopes to absorb the displaced workers at other locations. A typical store employs 10 people - two-thirds of them part-timers.
Charming Shoppes also will pull the plug on its four Petite Sophisticate full-line retail stores, but not Petite Sophisticate Outlet stores. The company bought the brand name from the now-defunct Casual Corner Group in 2006 and started with outlets first before deciding to revive the full-price retail stores last year.
The restructuring actions will save Charming Shoppes $20 million a year before taxes.
They will also lead to a one-time, pretax charge of $17.3 million - or 9 cents per share after taxes - to pay for severance, benefits, lease terminations and a write down of store assets. The charge will be spread over several quarters.
The Associated Press contributed to this story.