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Charming Shoppes Shops for Lane Bryant

Acquisition from The Limited will produce formidable plus-size retail operation; Limited also takes

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Charming Shoppes, Inc. (Bensalem, Pa.) has completed the rumored acquisition of the Lane Bryant operation from The Limited Inc. (Columbus, Ohio). The two retail organizations signed a definitive agreement worth $335 million. The Limited will own approximately 8 percent of Charming Shoppes common stock as a result of the transaction, which is expected to close during the third quarter subject to Charming Shoppes obtaining financing

“This is a transformational acquisition for Charming Shoppes,” said chairman, president and ceo Dorrit Bern. “Lane Bryant is the premier brand in the plus-size market. It is the most recognized brand in the fastest-growing area of women's apparel. This acquisition firmly positions us as a leader in the sale of plus-size specialty apparel.”

Bern said he sees a successful synergy between Lane Bryant, which operates in multiple retail venues — primarily leading malls – and Charming Shoppes'core competency in strip centers.

Following the transaction, Charming Shoppes will have over $2.5 billion in annual sales with approximately 70 percent of its revenue derived from plus-sizes. It will command a chain of nearly 2500 mall-based and strip center stores in 48 states. Charming Shoppes said it plans to operate Lane Bryant as a standalone operation headquartered in Columbus that does not compete with its existing brands.

The 97-year-old Lane Bryant was acquired by The Limited in 1982. The business had net sales of $930 million in fiscal 2001 and operates 653 stores in 46 states. Its proprietary brands include Venezia Jeans Clothing Company and Cacique, the company's intimate apparel line.

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Charming Shoppes operates 1774 stores in 48 states under the Fashion Bug, Fashion Bug Plus, Catherine's Plus Sizes, The Answer, Added Dimensions, Monsoon and Accessorize nameplates. While Fashion is the company's largest brand, with over 1200 stores in 46 states targeting low-moderate income women 20-49 years old, it is Catherine's Plus Sizes that represents the best fit with Lane Bryant. There are more than 400 stores in 44 states targeting large-size women 40-65 years old.

The Limited also announced that it has established Galyan's Trading Co., its 22-store sporting goods retail operation, as an independent, publicly owned company. The Limited acquired Galyan's (Plainfield, Ind.) in 1995 and sold about 70 percent of it in 1999. Galyan's began trading on the NASDAQ on June 27 under the ticker symbol GLYN. Galyan's has built its success on superstore (80,000-100,000-square-foot) formats featuring rock-climbing walls and putting greens. While the company operates some freestanding locations, it has said it plans to focus future expansion on anchor tenant locations in malls and shopping centers, because they tend to be more accessible to female customers.

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