Christopher & Banks Corporation Announces Store Closing Plan and Updated Real Estate Strategy
Estimates Pre-Tax Charges of $12 to $16 Million Consisting of Cash
Charges of $5 to $7 Million and Non-Cash Charges of $7 to $9 Million
Over the Next Three Fiscal Quarters Associated with the Store Closing
Plan
Also Announces Previously Implemented Workforce Reduction
MINNEAPOLIS--(BUSINESS WIRE)--
Christopher & Banks Corporation (NYSE: CBK), a specialty women's apparel
retailer, today announced that the Company's Board of Directors, after
reviewing the results of an in-depth analysis of the Company's store
portfolio, authorized plans to close approximately 100 stores, almost
all of which are underperforming, with a significant majority targeted
for completion by the end of January, 2012. As part of the Company's
overall real estate strategy, the Company also will seek to restructure
the occupancy costs of a majority of its remaining stores. In addition,
the Company intends to accelerate its plans to convert or consolidate a
number of its existing Christopher & Banks and CJ Banks stores into dual
format stores.
The Company also announced that effective October 28, 2011 it
implemented a workforce reduction involving its home office and field
management organization.
The anticipated store closing expenses primarily consist of cash charges
of $5 million to $7 million attributable to estimated lease termination
liabilities and severance costs, and non-cash asset impairment charges
of $7 million to $9 million. The Company anticipates pre-tax expenses
associated with the closing of the approximately 100 stores to range
from approximately $12 million to $16 million in the aggregate over the
next three fiscal quarters. In addition, the Company anticipates taking
a non-cash impairment charge of approximately $2 million in the third
fiscal quarter associated with its remaining store base. On an after-tax
basis, the charges associated with the store closings and the non-cash
impairment charge for existing stores are expected to range in the
aggregate from $0.39 to $0.49 per diluted share over the next three
fiscal quarters, based on an effective tax rate in the low single digits.
For the third quarter of fiscal 2012, the Company expects to record a
charge of approximately $0.01 per diluted share associated with the
workforce reduction implemented on October 28, 2011. The above expenses
and charges were not included in the Company's business outlook for
fiscal 2012, provided on October 5, 2011.
Larry Barenbaum, President and Chief Executive Officer, said, "We have
conducted an in-depth assessment of our store portfolio, which included
an analysis of the portfolio by RCS Real Estate Advisors. Following that
assessment, we have made the strategic decision to close approximately
100 stores. As part of our go-forward real estate strategy, we also
intend to restructure overall occupancy costs at a majority of our
remaining stores and to accelerate the conversion of a number of our
existing stores to a dual store format, which offers missy, petite and
plus sizes under one roof. We anticipate that these initiatives will
help us to both improve overall store productivity and support our
return to profitability."
Mr. Barenbaum continued, "We recently made the decision to reduce the
size of our labor force. We thank the affected employees for their
efforts and dedication. As we prepare for the next fiscal year, we
continue to evaluate our cost structure and capital expenditure
requirements and we will remain focused on carefully managing expenses
and inventories, as well as preserving our cash."
The workforce reduction impacted approximately 7% of the Company's
corporate headquarters employees, excluding the distribution center, and
approximately 13% of its store operations field management team. The
Company is offering assistance to employees affected by the workforce
reduction in the form of severance. In connection with the workforce
reduction, the Company anticipates a reduction in annual expenses of
approximately $2.2 million.
Additional details regarding the impact of these decisions will be
provided as part of the Company's next quarterly earnings release, which
is currently scheduled for December 22, 2011.
About Christopher & Banks
Christopher
& Banks Corporation is a Minneapolis-based specialty retailer of women's
clothing. As of November 11, 2011, the Company operates 761 stores
in 45 states consisting of 472 Christopher
& Banks stores, 238 stores in their plus size clothing division
CJ Banks, 28 dual-concept stores and 23 outlet stores. The Company also
operates the www.ChristopherandBanks.com
and www.CJBanks.com
e-Commerce websites.
Keywords: Christopher & Banks, CJ Banks, Women's Clothing, Plus
Size Clothing, Petites, Extended Sizes, Outfits.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements, made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The forward-looking
statements may use the words "expect", "anticipate", "plan", "intend",
"project", "believe" and similar expressions and include the statements
(i) that the Company plans to close approximately 100 stores, almost all
of which are underperforming, with a significant majority targeted for
completion by the end of January, 2012; (ii) that the Company also
intends to seek to restructure overall occupancy costs at a majority of
its remaining stores; (iii) that the Company plans to accelerate the
conversion of a number of its existing Christopher & Banks and CJ Banks
stores to dual format stores; (iv) that the anticipated store closing
expenses primarily consist of cash charges of $5 million to $7 million
attributable to estimated lease terminations and severance costs, and
non-cash asset impairment charges of $7 million to $9 million; (v) that
the Company anticipates pre-tax expenses associated with the closing of
the underperforming stores to range from approximately $12 million to
$16 million in the aggregate over the next three fiscal quarters;
(vi) that the Company anticipates taking a non-cash impairment charge of
approximately $2 million in the third fiscal quarter associated with its
remaining store base; (vii) that on an after-tax basis the charges
associated with closing stores and the non-cash impairment charge for
existing stores are expected to range in the aggregate from
approximately $0.39 to $0.49 per diluted share, over the next three
fiscal quarters, based on an anticipated effective tax rate in the low
single digits; (viii) that for the third quarter of fiscal 2012, the
Company expects to record a charge of approximately $0.01 per
diluted share, associated with the workforce reduction; (ix) that the
Company anticipates that planned store closings, together with the
planned restructuring of occupancy costs at a majority of its stores and
the conversion or consolidation of a number of existing stores to a dual
store format, will help the Company to both improve overall store
productivity and support its return to profitability; (x) that as the
Company prepares for the next fiscal year, it will continue to evaluate
its cost structure and capital expenditure requirements and will remain
focused on carefully managing expenses and inventories, as well as
preserving its cash; and (xi) that in connection with the workforce
reduction the Company anticipates a reduction in annual expenses of
approximately $2.2 million. These statements are based on
management's current expectations and are subject to a number of
uncertainties and risks, as well as assumptions that, if they do not
fully materialize or prove incorrect, could cause our actual results to
differ materially from those expressed or implied by the forward-looking
statements. Important factors that could cause actual results to
differ materially from estimates or projections contained in the
forward-looking statements include, but are not limited to: (i) the
inherent difficulty in forecasting consumer buying and retail traffic
patterns which may be affected by factors beyond our control, such as a
weakness in overall consumer demand; adverse weather, economic or
political conditions; and shifts in consumer tastes or spending habits
that result in reduced sales; (ii) lack of acceptance of the Company's
fashions, including its seasonal fashions; (iii) lack of acceptance of
the dual store format; (iv) the ability of the Company and the third
parties assisting it to negotiate lease terminations or modifications,
including financial terms, that it considers reasonable, acceptable and
in line with its assumptions as described above; (v) the ability to
effectively perform its operations with a reduced headcount; (vi) the
ability of the Company's infrastructure and systems to adequately
support our operations; (vii) effectiveness of the Company's brand
awareness, marketing programs and efforts to enhance the in-store
experience; (viii) the failure to successfully implement the Company's
strategic and tactical plans; and (ix) general economic conditions could
lead to a reduction in store traffic and in consumer spending on women's
apparel.
Readers are cautioned not to place undue reliance on these
forward-looking statements which are based on current expectations and
speak only as of the date of this release. The Company does not
assume any obligation to update or revise any forward-looking statement
at any time for any reason.
Certain other factors that may cause actual results to differ from
such forward-looking statements are included in the Company's periodic
reports filed with the Securities and Exchange Commission and available
on the Company's website under "Investor Relations" and you are urged to
carefully consider all such factors.
Christopher & Banks Corporation
Michael Lyftogt, 763-551-5000
Senior
Vice President,
Chief Financial Officer
or
INVESTOR
RELATIONS:
ICR, Inc.
Jean Fontana, 646-277-1214
Source: Christopher & Banks Corporation
News Provided by Acquire Media
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