Bensalem, Pa. Charming Shoppes Inc., which operates Lane Bryant and Fashion Bug stores, said Thursday that it plans to cut 225 positions, including some that are currently open, as part of the apparel retailer's ongoing plan to restructure its business.
As a result, Charming Shoppes expects to book about $2 million in costs during the fourth fiscal quarter ending Jan. 31. The company expects the action to result in pretax annualized cost savings of about $12 million for the next fiscal year ending Jan. 30, 2010.
In November, Charming Shoppes announced that it would discontinue the Lane Bryant Woman catalog and close up to 100 stores in fiscal 2010, in addition to the 150 stores the company said it would close during the current fiscal year.
The company expects its plan to reduce costs by about $100 million to $125 million over the next two fiscal years, with about $75 million to be booked in fiscal year 2010.
"It has been our strategy to return the company's focus and energies to our core brands — Lane Bryant, Fashion Bug and Catherines," said chairman and interim chief executive Alan Rosskamm in a statement.
Rosskamm said the company expects to end the fiscal year with cash balances in the range of $80 million to $85 million. He noted that there are no outstanding borrowings on the company's committed $375 million revolving credit facility.
Also Thursday, Charming Shoppes reported that same-store sales dropped 14% during the nine-week holiday period ended Jan. 3.
Net sales from continuing operations for the nine weeks ended Jan. 3 also dropped 14%, to $506.3 million from $586.1 million in the prior-year period.
Rosskamm said the fourth-quarter sales performance to date has been "slightly below our plan for the period." He said the company has remained focused on limiting price discounting, which improved merchandise margins at its three core brands during the period.