The interim CEO of Christopher & Banks is ushering in a number of merchandising changes, including increasing the mix of fashion-oriented products, in an effort to revive sales at the Plymouth-based women's apparel retailer.
Interim Christopher & Banks CEO lays out turnaround plan
Following disappointing holiday sales, the interim CEO works for a turnaround.
March 16, 2017 at 3:08AM
Joel Waller was selected in January to step in on a temporary basis after LuAnn Via, the company's previous CEO, was ousted by a reconstituted board. The leadership change came after a steep decline in holiday sales that signaled a stalled turnaround.
Waller laid out the initiatives on Wednesday morning after the company reported disappointing results for the full fourth quarter, which included the holidays and showed comparable sales dropped 7.8 percent.
"Based on my observations during my first two months back, I believe we have an opportunity to better leverage our highly loyal customer base to drive an improved and more consistent financial performance beginning in the back half of the year and over the long term," he told analysts during a conference call.
In 2016, about two-thirds of Christopher & Banks' merchandise was core products; the other third was fashion merchandise. Starting in April, he said the retailer will begin to flip that balance by introducing new, more relevant styles "rather than just repeating last year's bestsellers."
The retailer also will review styles every week to identify emerging trends and mark down products that are selling more slowly, said Waller, who also served as interim CEO in 2012.
Waller also wants to rebalance the merchandise by size. He said the mixed-format stores right now skew too heavily toward plus sizes.
In addition, a cross-functional team will focus on improving the company's outlet business by making a clearer price distinction between the two while better managing clearance inventory, he said.
The new merchandising approach will be fully implemented by the fall. The company also will roll out other changes to improve marketing, its e-commerce website and store operations.
"I am confident we have identified the key issues facing the company and are well down the path to addressing them," Waller said.
The company's shares dropped 1.7 percent Wednesday, closing at $1.18.
Since the company does not expect the changes to be reflected in sales until the third quarter, executives did not provide near-term guidance for sales and profits in the coming months.
In January, Christopher & Banks warned that sales in the fourth quarter, which includes the holiday period, were coming in much lower than expected. Its final quarterly results it released Wednesday were more or less in line with that lowered guidance.
Sales in the quarter ended Jan. 28 dropped 10.1 percent to $85 million, compared with $94.6 million in the same period a year ago. Its gross margins also fell as it marked down prices more steeply than expected to clear out inventory. It reported a loss of $17.2 million, or 46 cents a share, in the quarter compared with a loss of $46.6 million, or $1.26 a share, in the same period a year ago.
The company also reported about $1.4 million in severance costs related to about a dozen corporate layoffs.
"While it's always a difficult decision to eliminate positions, the impact was small at less than 5 percent," Monica Dahl, the company's chief marketing officer, said in an e-mail.
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