-Comp store sales expected to be down
between 7% and 8%-
-Joel Waller named interim CEO replacing
LuAnn Via-
-Cash at the end of the year expected to be
approximately $30 million-
Christopher & Banks Corporation (NYSE:CBK), a specialty
women’s apparel retailer, today announced an update to its guidance
for the fourth quarter and full fiscal year, the election of Joel
Waller as interim President and Chief Executive Officer (“CEO”) and
the departure of LuAnn Via, President & CEO.
The Company’s change in guidance for the fourth quarter is
attributable to a number of factors, including lower traffic,
ongoing headwinds in women’s apparel and weather. The most
significant decline occurred during the two full weekends prior to
Christmas where sales were negatively impacted by an estimated $4.5
million. The Company now anticipates net sales for the quarter to
be between $85 million and $86 million. The continued strong
performance in the Company’s eCommerce business, which grew by 15%
in fiscal December, was offset by lower-than-anticipated sales in
its other channels, particularly outlets. In response to these soft
sales trends, the Company was more promotional than originally
planned in order to drive sales and manage inventory levels, which
has led to gross margin pressure. As a result, the Company now
expects its net loss for the quarter to be in the range of $16
million to $17 million, including transition costs associated with
the change in management. Despite the lower than planned sales,
cash, cash equivalents and investments are expected to be
approximately $30 million which is near the low end of the
Company’s earlier guidance, and the Company expects to end the
fiscal year with on-hand inventory at cost down in the low single
digits, which is within its previous guidance. The Company
continues to be highly focused on managing its expenses, conserving
its cash and controlling inventory.
The Company also reported that LuAnn Via, President & Chief
Executive Officer and a director of the Company, will be departing
effective today, and that Lisa Wardell resigned as a member of the
Board of Directors and Board Chair, effective January 10, 2017.
In connection with Ms. Via’s departure as Chief Executive
Officer, the Company’s Board of Directors announced that, effective
today, Joel Waller has been elected interim President & CEO and
a member of the Board of Directors. Mr. Waller successfully served
in a similar capacity for the Company several years ago. He has an
extensive retail background with over 35 years of industry
experience as both an executive and more recently as a consultant.
His proven track record includes serving as the Chief Executive
Officer of The Wet Seal, Inc., a specialty retailer of juniors
clothing, shoes and accessories from 2005 to 2008 and prior to that
as the Chief Executive Officer of Wilsons Leather, a specialty
retailer of leather outerwear, accessories and apparel, for
approximately twenty years, ending in January 2005.
In addition, the Company announced that Kent Kleeberger has been
elected as Board Chair. The Board of the Company intends
immediately to commence a search for a permanent Chief Executive
Officer and will be engaging a national search firm to assist it in
that process.
Mr. Kleeberger said, “We thank LuAnn for her service and
contributions as President and CEO during these challenging times,
and wish her well in her future endeavors. LuAnn has laid an
excellent foundation for future growth and was instrumental in
upgrading our assortments, talent, technology and ecommerce
platforms.”
Mr. Waller commented, “I am very excited to be rejoining
Christopher & Banks and working with the management team and
the entire organization. I am very confident in the opportunity to
return the Company to profitability and have requested that
my compensation package be directly aligned with increasing
shareholder value.”
Mr. Kleeberger commented that “I and the other members of the
Board look forward to having Joel’s leadership again. We are
confident that he will provide clear direction and a smooth
transition as we search for a permanent Chief Executive
Officer.”
Mr. Kleeberger stated that, “as we look to Fiscal 2017, the
Board of Directors and management, under Joel’s leadership, are
committed to continuing to explore ways to maximize shareholder
value, including implementing the cost savings initiatives
previously identified for fiscal 2017, exploring additional cost
savings opportunities, and inventory optimization. In addition to
these current efforts, the Company is also exploring opportunities
to maximize e-Commerce growth potential, generate free cash flow
and identify potential growth opportunities and strategic
transactions.”
About Christopher & Banks
Christopher & Banks Corporation is a Minneapolis-based
national specialty retailer featuring exclusively designed
privately branded women’s apparel and accessories. As of January
17, 2017, the Company operates 499 stores in 45 states consisting
of 315 MPW stores, 82 Outlet stores, 52 Christopher & Banks
stores, and 50 stores in its women’s plus size clothing division CJ
Banks. The Company also operates the www.ChristopherandBanks.com
eCommerce website.
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”, “drive” “in
order to” and similar expressions and include the statements (i)
that the Company now anticipates net sales for the quarter to be
between $85 million and $86 million; (ii) that the Company expects
its net loss for the quarter to be in the range of $16 million to
$17 million, including transition costs associated with the change
in management; (iii) that despite the lower than planned sales,
cash, cash equivalents and investments are expected to be
approximately $30 million which is near the low end of the
Company’s earlier guidance of the low-to mid-$30 million range;
(iv) that despite the lower than planned sales, the Company expects
to end the fiscal year with on-hand inventory at cost down in the
low single digits, which is within its previous guidance; (v) by
Joel Waller that he is very confident in the opportunity to return
the Company to profitability; (vi) by Kent Kleeberger that he and
the Board are confident that Mr. Waller will provide clear
direction and a smooth transition as the Company searches for a
permanent Chief Executive Officer and (vii) by Kent Kleeberger that
as the Company looks to fiscal 2017, the Board of Directors and
management, under Joel’s leadership, are committed to continuing to
explore ways to maximize shareholder value, including implementing
the cost savings initiatives previously identified for fiscal 2017,
exploring additional cost savings opportunities, and inventory
optimization and that in addition to these current efforts, the
Company is also exploring opportunities to maximize e-Commerce
growth potential, generate free cash flow and identify potential
growth opportunities and strategic transactions .
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 the Company’s 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 the
Company’s 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 or
gross margins; (ii) lack of acceptance of the Company’s fashions,
including its seasonal fashions; (iii) the ability of the Company’s
infrastructure and systems to adequately support its operations;
(iv) the effectiveness of the Company’s brand awareness, marketing
programs and efforts to enhance the in-store experience; (v) the
possibility that, because of poor customer response to the
Company’s merchandise, management may determine it is necessary to
sell merchandise at lower than expected margins or at a loss; (vi)
the failure to successfully implement the Company’s strategic and
tactical plans and initiatives; (vii) general economic conditions
could lead to a reduction in store traffic and in consumer spending
on women’s apparel; (viii) fluctuations in the levels of the
Company’s sales, expenses or earnings; and (ix) risks associated
with the performance and operations of the Company’s Internet
operations.
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 “For Investors” and
you are urged to carefully consider all such factors.
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version on businesswire.com: http://www.businesswire.com/news/home/20170117005697/en/
Christopher & Banks CorporationPeter G. Michielutti,
763-551-5000Executive Vice President, Chief Operating Officer and
Chief Financial OfficerorInvestor RelationsICR, Inc.Jean Fontana,
646-277-1214