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Charlotte Russe Rejects Takeover Proposal

BY CSA STAFF

San Diego Approximately a week after receiving an unsolicited offer from KarpReilly Capital Partners LP and H.I.G. Capital LLC to acquire all of its outstanding shares, Charlotte Russe rejected the offer in a letter on Wednesday.

KarpReilly and H.I.G. offered to purchase the company’s outstanding shares for a valuation rate between $9.00 and $9.50 per share in an all-cash, all-equity transaction. KarpReilly also disclosed that it has acquired 1.12 million shares of Charlotte Russe, which, at a 5.4% ownership stake, makes it one of the company’s largest shareholders.

According to a letter issued by the retailer’s chairman of the board of directors, Jennifer Salopek, on Wednesday, Charlotte Russe said, “After careful review and in consultation with our legal and financial advisors, our Board unanimously determined that your unsolicited proposal is definitively not in the best interests of Charlotte Russe shareholders.”

The letter went on to describe that Charlotte Russe has been operating under a number of operational, merchandising and inventory-performance constraints and losses. However, since July, interim CEO Len Logil has been working on a restructuring plan and on creating a new operational foundation as the company enters 2009. The plan, according to Charlotte Russe, will focus on brand positioning, merchandising assortment, inventory management, real estate strategy and capital utilization.

On Nov. 12, the company completed its search for a new leadership team, the letter reported.

The Charlotte Russe board felt that the proposal’s timing attempted to “take advantage of current market conditions and this would undermine the long-term shareholder value that the board and management team is committed to building,” Salopek said in the letter.

“We strongly believe that we have the right plan and right people to make Charlotte Russe succeed,” the letter concluded.

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Walmart to partner with Feeding America

BY CSA STAFF

BENTONVILLE, Ark. Walmart announced that its supercenters and Neighborhood Markets will partner with Feeding America, the nation’s largest charitable hunger-relief organization, to provide an estimated 90 million pounds of food annually — the equivalent of 70 million meals — to families in need by the end of 2009.

In addition, the Wal-Mart Foundation announced a $2.5 million cash donation to Feeding America. These funds will be used to help Feeding America food banks improve warehouse capacity and purchase 20 new refrigerated trucks to safely transport food from Walmart stores to food pantries, soup kitchens and other Feeding America agencies.

“We are pleased to partner with Feeding America during a time of nearly unprecedented need and provide nutritious meals for their families,” said Bill Simon, evp and coo of Walmart U.S. “Given the current state of the economy and the increased burden on neighborhood food pantries and soup kitchens, we are enlisting our entire network of stores and clubs to participate in this food donation program to provide relief to communities throughout the country.”

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Despite 3Q growth, Ross cautious on 4Q outlook

BY CSA STAFF

PLEASANTON, Calif. Ross Stores reported that earnings per share for the third quarter increased 22% to 44 cents, from 36 cents for the same period last year. Net earnings for the third quarter were $57.3 million, up from $48.7 million for the third quarter last year. Fiscal 2008 third quarter sales increased 6% to $1.555 billion, with comparable-store sales even with the prior year period.

Michael Balmuth, vice chairman, president and ceo, commented, “We are pleased with our solid third quarter earnings growth, especially considering the very challenging macro-economic and retail environment. The ongoing resilience and flexibility of our off-price business model enabled us to respond to these external pressures by further reducing both inventories and expenses. These actions, along with better-than-expected shortage results from our annual physical inventory during the quarter, enabled us to protect profit margins and deliver earnings per share at the high end of our original guidance.”

Ross said it now expects fourth quarter comparable-store sales to decline 1% to 3% and earnings per share to be in the range of 69 cents to 75 cents, compared to 70 cents in the 2007 fourth quarter.

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