Charming Shoppes will shop around Fashion Bug
But web sales grew 5.9% in Q3.
Web sales continued to generate growth for Charming Shoppes Inc. in the third quarter, but the company is also spinning off a brand and looking at other strategic alternatives in order to become more competitive.
Charming Shoppes, No. 132 in the Internet Retailer Top 500, will sell off or otherwise divest its Fashion Bug brand, a discount apparel retail brand that sells business casual and dress products to women sizes 6 to 30. The company has yet to say how it will divest Fashion Bug or if Charming Shoppes has any interested buyers.
In conjunction with selling off a core brand, Charming Shoppes will also conduct a more strategic business review and concentrate on growing its Lane Bryant brand. “We are currently engaged in a number of initiatives that we believe will further improve our business and enhance shareholder value,” says CEO Anthony Romano. “The first substantive step is our decision to divest our Fashion Bug business. While we have made progress in improving Fashion Bug's profitability, we believe that it does not fit within our future strategic plan. Concurrent with this process, we are assessing the appropriate expense structure for the company in light of the planned divestiture of Fashion Bug."
Charming Shoppes is undertaking a financial and strategic review in the wake of a tough third quarter. For the quarter ended Oct. 29, Charming Shoppes reported:
- E-commerce accounted for 8% of total sales compared with 7% in the prior year. Based on that percentage listed in Charming Shoppes' most recently filed third quarter earnings report with the U.S. Securities and Exchange Commission, Internet Retailer calculates e-commerce grew 5.9% to $34.3 million from $32.4 million in the third quarter of 2010.
- Total sales declined year over year 7.3% to $429.7 from $463.6 million.
- Comparable-store sales declined 4%.
- Net loss was $13 million compared with $18.8 million in the prior year.