FOR IMMEDIATE
RELEASE
CHARMING
SHOPPES ANNOUNCES
EXPLORATION
OF STRATEGIC ALTERNATIVES FOR
NON-CORE
MISSES APPAREL CATALOGS;
ADDITIONAL
CAPITAL BUDGET REDUCTIONS;
PLANNED
REFINANCING OF REAL ESTATE ASSETS
BENSALEM,
PA., April 25, 2008 - Charming Shoppes, Inc., (Nasdaq: CHRS), a leading
multi-brand, multi-channel specialty apparel retailer specializing in women's
plus-size apparel, announced today that its Board of Directors is
exploring a broad range of operating and strategic alternatives for its non-core
misses apparel catalog titles in order to provide a greater focus on its core
brands, Lane Bryant, Catherines and Fashion Bug, and to enhance shareholder
value. The Company has retained Banc of America Securities and Lehman
Brothers as its financial advisors in connection with this
process. The Company noted that there can be no assurance that this
process will result in any specific course of action or
transaction. The Company does not intend to comment further on this
evaluation until final determinations have been made.
Dorrit J.
Bern, Chairman, Chief Executive Officer and President of Charming Shoppes, Inc.
stated, “Our commitment to our multi-brand, multi-channel strategy remains a key
element of our long term strategy. Our core plus apparel brands possess leading
market positions and strong long-term growth opportunities, and we will continue
to utilize our direct-to-consumer infrastructure to further develop these core
brands. We have received a number of inquiries from qualified third
parties and are evaluating several alternatives for our non-core apparel catalog
titles which would allow us to focus exclusively on and accelerate the growth of
our core plus apparel businesses, with the goal of enhancing shareholder value.”
Bern continued, “Additionally, despite our strong liquidity, which includes cash
on the balance sheet and a fully-committed line of credit, we have made the
generation and conservation of cash a priority during the current economic
downturn. To that end, our ongoing review of our operations and strategic assets
has determined that we are able to commit to further reduce our budgeted capital
expenditures by an additional $20 million during the current fiscal year, which
will be generated from both reduced spending on store infrastructure and growth
and from further capital reductions in non-critical infrastructure improvements.
This reduction is in addition to our previously announced reduction of $43
million for fiscal year 2009. In total, this $63 million reduction in planned
capital spending for the current year now represents a decrease of nearly 50%
compared to our fiscal year 2008 capital expenditures.
“Further,”
Bern stated “we believe a refinancing of certain of our real estate assets would
generate meaningful additional net cash proceeds to the Company. As a result, we
anticipate executing on this refinancing during the second quarter of the
current fiscal year.”
At
February 2, 2008, Charming Shoppes, Inc. operated 2,409 retail stores in 48
states under the names LANE BRYANT(R), FASHION BUG(R), FASHION BUG PLUS(R),
CATHERINES PLUS SIZES(R), LANE BRYANT OUTLET(R), PETITE SOPHISTICATE(R) and
PETITE SOPHISTICATE OUTLET(R). Apparel, accessories, footwear and gift catalogs,
including the following titles, are operated by Charming Shoppes' Crosstown
Traders: Lane Bryant Woman, Old Pueblo Traders, Bedford Fair, Willow Ridge, Lew
Magram, Brownstone Studio, Intimate Appeal, Monterey Bay Clothing Company,
Coward Shoe and Figi's. Please visit www.charmingshoppes.com
for additional information about Charming Shoppes, Inc.
This
press release contains certain forward-looking statements concerning the
Company's operations, performance, and financial condition. Such forward-looking
statements are subject to various risks and uncertainties that could cause
actual results to differ materially from those indicated. Such risks and
uncertainties may include, but are not limited to: the failure to consummate our
identified strategic solution for our non-core misses apparel catalog titles and
the refinancing of certain real estate assets, the failure to effectively
implement our planned cost and capital budget reduction plans, the failure to
effectively implement the Company's plans for consolidation of the Catherines
Plus Sizes brand, a new organizational structure and enhancements in the
Company's merchandise and marketing, the failure to generate a positive response
to the Company's new Lane Bryant catalog and the Lane Bryant credit card
program, the failure to implement the Company's business plan for increased
profitability and growth in the Company's retail stores and direct-to-consumer
segments, the failure to successfully implement the Company's expansion of
Cacique through new store formats, the failure to achieve improvement in the
Company's competitive position, adverse changes in costs vital to catalog
operations, such as postage, paper and acquisition of prospects, declining
response rates to catalog offerings, the failure to maintain efficient and
uninterrupted order-taking and fulfillment in our direct-to-consumer business,
changes in or miscalculation of fashion trends, extreme or unseasonable weather
conditions, economic downturns, escalation of energy costs, a weakness in
overall consumer demand, the failure to find suitable store locations, increases
in wage rates, the ability to hire and train associates, trade and security
restrictions and political or financial instability in countries where goods are
manufactured, the interruption of merchandise flow from the Company's
centralized distribution facilities, competitive pressures, and the adverse
effects of natural disasters, war, acts of terrorism or threats of either, or
other armed conflict, on the United States and international economies. These,
and other risks and uncertainties, are detailed in the Company's filings with
the Securities and Exchange Commission, including the Company's Annual Report on
Form 10-K for the fiscal year ended February 2, 2008 and other Company filings
with the Securities and Exchange Commission. Charming Shoppes assumes no duty to
update or revise its forward-looking statements even if experience or future
changes make it clear that any projected results expressed or implied therein
will not be realized.
On April
2, 2008, Charming Shoppes, Inc. filed a definitive proxy statement with the
Securities and Exchange Commission (the “SEC”) in connection with the 2008
Annual Meeting of Shareholders of Charming Shoppes, Inc. and began the process
of mailing its definitive proxy statement and a GOLD proxy card to shareholders.
Charming Shoppes’ shareholders are strongly advised to read Charming Shoppes’
proxy statement as it contains important information. Shareholders may obtain an
additional copy of Charming Shoppes’ definitive proxy statement and any other
documents filed by Charming Shoppes with the SEC for free at the SEC’s website,
www.sec.gov, or
at Charming Shoppes’ website at www.charmingshoppes.com.
In addition, copies of Charming Shopppes proxy materials, along with a GOLD
proxy card, may be requested at no charge by contacting MacKenzie Partners, Inc.
at 1-800-322-2885 or via email at charming@mackenziepartners.com.
Detailed information regarding the names, affiliations and interests of
individuals who are participants in the solicitation of proxies of Charming
Shoppes’ shareholders is available in Charming Shoppes’ definitive proxy
statement filed with the SEC on April 2, 2008.
INVESTOR
AND ANALYST CONTACT:
Gayle M.
Coolick
Director
of Investor Relations
Charming
Shoppes, Inc.
(215)
638-6955
MEDIA
CONTACT:
Matthew
Sherman
Joele
Frank, Wilkinson Brimmer Katcher
(212)
355-4449