Charming Shoppes Inc. (Bensalem, Pa.), a retail apparel chain specializing in women's plus-size apparel, reported net income increased 14 percent, while net sales increased 2 percent for the first quarter ended April 30, 2005. Comparable store sales for the corporation were flat.
“We are pleased to be reporting record net income for our first quarter, which exceeded our previously stated expectations,” said Dorrit Bern, Charming Shoppes’ chairman, ceo and president. “Our Catherines Plus Sizes brand continues to show improvement and reported positive 4 percent comparable store sales for the quarter, with Spring merchandise offerings that were well received by our customer. Also contributing to our performance was continuing improvement at our Lane Bryant brand.”
In a separate announcement, the company stated that it has entered into a definitive agreement to acquire Crosstown Traders Inc., a direct marketer of women's apparel, footwear and specialty gifts, from JPMorgan Partners, the private equity arm of J.P. Morgan Chase & Co. Subject to regulatory approval and certain closing conditions, the transaction should be completed during the second quarter of the current fiscal year.
Under terms of the agreement, Charming Shoppes will pay approximately $218 million in cash for Crosstown Traders, plus the assumption of Crosstown Traders' debt.
Tucson, Arizona-based Crosstown Traders operates 11 catalog titles, including Old Pueblo Traders, Bedford Fair Lifestyles, Bedford Fair Shoestyles, Willow Ridge, Lew Magram, Brownstone Studio, Regalia, Intimate Appeal, Monterey Bay Clothing Company, and Coward Shoe. Figi's, headquartered in Marshfield, WI, markets food and specialty gift products. The company reported 2004 revenues of approximately $460 million. Charming Shoppes plans to continue to operate Crosstown Traders as a separate entity at its Tucson headquarters.
“This is a significant milestone in Charming Shoppes' transformation into a multi-channel retailer, and provides us with a highly profitable platform through which we can increase shareholder value,” said Bern. ” This strategic acquisition affords us the opportunity to immediately and profitably expand both our revenue and customer base. At the same time, this is a key step in our preparation for the launch of our own catalog for the Lane Bryant brand in October 2007, when the Lane Bryant catalog trademark reverts to us.”
Crosstown Traders president Steven Lightman added, “We are thrilled with Crosstown's opportunity to become part of and contribute strongly to the direct-to-consumer strategy at Charming Shoppes. The prospects for each of our companies to add to the strengths of the other are compelling.”
Crosstown Traders was formed in 2002 by JPMorgan Partners, the private equity arm of J.P. Morgan Chase & Co., to acquire Arizona Mail Order Company and Figi's from Federated Department Stores. It has nearly 4 million active customers and operates three distribution centers and 850 call center seats. Charming Shoppes operates 2230 stores in 48 states under the names Lane Bryant, Fashion Bug, Fashion Bug Plus and Catherine Plus Sizes.