Charming Shoppes, Inc. (NASDAQ:CHRS.DL)

CAPS Rating: No stars

The Company operates retail stores located throughout the continental United States and related websites that merchandise plus-size, misses, and junior sportswear, dresses, coats, and intimate apparel, as well as accessories and casual footwear.


Player Avatar NetscribeRetail (91.76) Submitted: 1/8/2007 7:21:58 AM : Outperform Start Price: $13.25 CHRS.DL Score: -38.94

Investors Charm!!!

Charming Shoppes is a specialty apparel retailer primarily focused on plus-size women’s apparel. The company offers three distinct brands namely LANE BRYANT, FASHION BUG and CATHERINE PLUS SIZES. They sell their offerings primarily through retail stores and direct channel. Charming Shoppes operates 2,386 retail stores across 48 states in U.S.

The $ 32 billion plus-size apparel market is estimated to grow more than 10% in the next 5 years. It is also estimated that plus size represents the fastest growing category in the women’s apparel market, with junior plus-size as the fastest growing segment within the demographic. This portends well for Charming Shoppes, which has a 40% market share in the women’s plus-size apparel market, and derives 77% of its revenues from plus-sizes.

Third quarter results have been healthy with 8% rise in retail sales that form 87% of the revenues. Net income grew by whooping 80% due to well-controlled administrative expenses and upswing in LANE BRYANT revenues. The new store concept of side-by-side CACIQUE store has worked well for the company and they plan to open or relocate 80% of their LANE BRYANT stores in the same format in 2007. Further, management anticipates Active wear, especially its own V SPORT private label, and sweaters to drive future revenues.

Bottom lines are likely to improve with rising proportion of sales through strip centers’ stores which carry lower rent and occupancy structure. Further, strong performance has encouraged the management to expect better fourth quarter results, which indicates about 12% full year revenue growth. All these factors make Charming Shoppes’ every investor charm.

Member Avatar NetscribeRetail (91.76) Submitted: 4/16/2007 5:09:15 AM
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Charming Shoppes (CHRS) looks a clear winner with a robust market share in the rapidly growing plus size apparel market. Despite, unsupportive weather conditions lately, the charming financial trend for this plus size women apparel continued as it ended the fiscal year with 9% revenue jump in the fourth quarter. CHRS managed to post massive growth in its fourth quarter net income owing to the improved seasonal mix and better inventory management.The only concern for the company is the unexciting business outlook in the first quarter of 2008 due to lower catalog sales. This has aroused pessimism for the same-store sales outlook in the first quarter. However, taking a broader view, the coming fiscal looks bright for the company as Lane Bryant could drive the growth prospects of the company. Lane Byrant brand is expected to grow as the company plans to open approximately 90 - 100 new stores and relocate about 75 - 90 stores in fiscal year 2008. Supporting the company’s multichannel strategy, additional resources have been allocated to the e-commerce infrastructure, which could enhance their e-commerce sales in the future.On the management front, appointment of Lori Twomey as the president of the Lane Byrant business could improve fortunes of the brand as Lori has rich merchandising experience of the plus-size business. Launching of Lane Bryant catalog in November 2007 aided by Crosstown’s infrastructure could ensure customer convenience in selecting the varied merchandise and drive sales. Also, debt of the company has gone down by over 25%, which could positive impact its profitability ahead. Thus, CHRS looks a good investment for the near future.

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