Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K MARCH 29, 2011 - CHARMING SHOPPES INC | form8kmar292911.htm |
| EX-99.1 - PRESS RELEASE DATED MARCH 29, 2011 - CHARMING SHOPPES INC | exh991mar292011.htm |
3rd Annual
CONSUMER CONFERENCE
CONSUMER CONFERENCE
March 30, 2011
> 2
Anthony M. Romano
President and
President and
Anthony M. Romano
President and
President and
Chief Executive Officer
Chief Executive Officer
Eric M. Specter
Executive Vice President and
Executive Vice President and
Eric M. Specter
Executive Vice President and
Executive Vice President and
Chief Financial Officer
Chief Financial Officer
> 3
Forward Looking Statements
The Company’s presentation may contain certain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 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 successfully execute our in-
stock inventory strategy could result in higher than planned levels of promotional activity in order to sell through excess
inventory, the failure to successfully execute our business plans could result in lower than planned sales and profitability,
the failure to realize the benefits from the sale of our credit card program to, and the operation of our credit card program
by, our third-party provider, the impact of changes in laws and regulations governing credit cards could limit the availability
of, or increase the cost of, credit to our customers, the failure to enhance the Company's merchandise and marketing and
accurately predict fashion trends, customer preferences and other fashion-related factors, the failure of growth in the
women's plus apparel market, the failure to continue receiving financing at an affordable cost through the availability of
credit we receive from our bankers, suppliers and their agents, the failure to effectively implement our planned store closing
plans, the failure to continue receiving accurate and compliant e-commerce and third-party processing services, the failure
to achieve improvement in the Company's competitive position, the failure to maintain efficient and uninterrupted order-
taking and fulfillment in our e-commerce and direct-to-consumer businesses, extreme or unseasonable weather conditions,
economic downturns, escalation of energy and transportation costs, adverse changes in the costs or availability of fabrics
and raw materials, 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 failure of our vendors to deliver quality and timely shipments in compliance with
applicable laws and regulations, the interruption of merchandise flow from the Company's centralized distribution facilities
and third-party distribution providers, inadequate systems capacity, inability to protect trademarks or other intellectual
property, 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, Quarterly Reports on Form 10-Q 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.
Litigation Reform Act of 1995 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 successfully execute our in-
stock inventory strategy could result in higher than planned levels of promotional activity in order to sell through excess
inventory, the failure to successfully execute our business plans could result in lower than planned sales and profitability,
the failure to realize the benefits from the sale of our credit card program to, and the operation of our credit card program
by, our third-party provider, the impact of changes in laws and regulations governing credit cards could limit the availability
of, or increase the cost of, credit to our customers, the failure to enhance the Company's merchandise and marketing and
accurately predict fashion trends, customer preferences and other fashion-related factors, the failure of growth in the
women's plus apparel market, the failure to continue receiving financing at an affordable cost through the availability of
credit we receive from our bankers, suppliers and their agents, the failure to effectively implement our planned store closing
plans, the failure to continue receiving accurate and compliant e-commerce and third-party processing services, the failure
to achieve improvement in the Company's competitive position, the failure to maintain efficient and uninterrupted order-
taking and fulfillment in our e-commerce and direct-to-consumer businesses, extreme or unseasonable weather conditions,
economic downturns, escalation of energy and transportation costs, adverse changes in the costs or availability of fabrics
and raw materials, 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 failure of our vendors to deliver quality and timely shipments in compliance with
applicable laws and regulations, the interruption of merchandise flow from the Company's centralized distribution facilities
and third-party distribution providers, inadequate systems capacity, inability to protect trademarks or other intellectual
property, 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, Quarterly Reports on Form 10-Q 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.
> 4
PRESENTATION
> 5
We Have A Strong And Unique Platform Of
Leading Plus Apparel Brands
Leading Plus Apparel Brands
The Plus-Size Authority
> 6
> More than half of American women wear size 14 or larger
> #1 in market share in women’s specialty plus-size
apparel*
apparel*
> #2 in market share in women’s plus-size apparel, a
$17.6B market, second only to Wal-Mart*
$17.6B market, second only to Wal-Mart*
> Lane Bryant’s Cacique® brand ranks #3 in women's total
intimate plus-size apparel, a $3.2B market*
intimate plus-size apparel, a $3.2B market*
> Charming Shoppes ranks #1 in market share in women's
specialty plus-size denim apparel, a $655M market*
specialty plus-size denim apparel, a $655M market*
*According to The NPD Group, Inc./Consumer Tracking Service 12 months ended January 2011
Our Market And Leadership Positions
> 7
Classic / Traditional
Fashion
Brand Positioning
> 8
www.lanebryant.com
She is 35-55 years old
She is a woman of many
lifestyles - work, casual, active
lifestyles - work, casual, active
Likes to experiment with fashion
She shops frequently and likes
to buy clothes with good quality
at a reasonable price
to buy clothes with good quality
at a reasonable price
She is brand-conscious and
prefers retailers that offer
fashionable choices
prefers retailers that offer
fashionable choices
Lane Bryant - ‘One Brand - One Vision’
> 9
www.cacique.com
Known for solutions, fit,
quality, fashion and style
quality, fashion and style
Represents 31% of sales
from the full-line
Lane Bryant chain
from the full-line
Lane Bryant chain
Offers key intimates
categories and
complementary products
categories and
complementary products
Introducing caciquebody
Cacique
> 10
She is 30-50 years old
She is value-minded
Loves the challenge of
finding a great deal with
coupons and store
promotions that are easy
to understand
finding a great deal with
coupons and store
promotions that are easy
to understand
Likes to shop for
complete outfits
complete outfits
www.fashionbug.com
Fashion Bug
> 11
www.catherines.com
She’s our baby-boomer,
45+ years old
45+ years old
Classic styling with an
emphasis on fit and
comfort
emphasis on fit and
comfort
Offering styling for the
woman wearing extended
sizes
woman wearing extended
sizes
She prefers clothing that is
more appropriate for her
age - she does not want to
dress “younger” than she is
more appropriate for her
age - she does not want to
dress “younger” than she is
Likes to look “put together”
Catherines
>12
Historical Profitability
> Significant progress made in 4th Quarter 2010
– 7% increase in total sales
¡ +9% comparable store sales; 41% increase in e-commerce
– +$24M improvement in adjusted EBITDA*
*Refer to GAAP to non-GAAP reconciliation at
http://www.charmingshoppes.com/investors/manage/index.asp
http://www.charmingshoppes.com/investors/manage/index.asp
> 13
>Then
– Fit
– In-stock
– Core basics
Then and Now - What is Different
>Now
– Fashion
– Relevance
– Outfitting
– Fit
– In-stock
– Value
>Size is no longer our sole differentiator
> 14
> For each of our brands,
returning to profitability
requires:
returning to profitability
requires:
– Eliminating negative EBITDA
stores
stores
Returning To Profitability
> 15
> For each of our brands,
returning to profitability
requires:
returning to profitability
requires:
– Eliminating negative EBITDA
stores
stores
– Improving our product
assortments
assortments
Returning To Profitability
> 16
> For each of our brands,
returning to profitability
requires:
returning to profitability
requires:
– Eliminating negative EBITDA
stores
stores
– Improving our product
assortments
assortments
– Increasing inventory
productivity
productivity
Returning To Profitability
> 17
> For each of our brands,
returning to profitability
requires:
returning to profitability
requires:
– Eliminating negative EBITDA
stores
stores
– Improving our product
assortments
assortments
– Increasing inventory
productivity
productivity
– Continued growth in digital
sales
sales
Returning To Profitability
> 18
> For each of our brands,
returning to profitability
requires:
returning to profitability
requires:
– Eliminating negative EBITDA
stores
stores
– Improving our product
assortments
assortments
– Increasing inventory
productivity
productivity
– Continued growth in digital
sales
sales
– Distorting resources to our
higher margining Lane Bryant
brand
higher margining Lane Bryant
brand
Returning To Profitability
> 19
> One Brand - One Vision
– Align Lane Bryant and Lane Bryant
Outlet
Outlet
– Consistency of product, design,
sourcing, marketing, and pricing
strategies
sourcing, marketing, and pricing
strategies
> Cacique company-wide
opportunity
opportunity
> Distort resources to Lane Bryant
> Brand image and marketing
activities
activities
> Expanding our Lane Bryant
and Cacique opportunities
and Cacique opportunities
Leveraging Our Lane Bryant and Cacique Opportunities
> 20
FINANCIAL REVIEW
> 21
Financial Review - 4th Quarter 2010
*Refer to GAAP to non-GAAP reconciliation at
http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioarchives
|
($ in millions, except EPS)
|
4th Quarter 2010
|
4th Quarter 2009
|
Change
|
|
Net Sales
|
$575.8
|
$539.0
|
+680 bps
|
|
Same Store Sales
|
+9%
|
-12%
|
|
|
Gross Profit
|
$247.6
|
$235.4
|
+$12.0
|
|
Gross Margin
|
43.0%
|
43.7%
|
-70 bps
|
|
Total Operating
Expenses |
$255.1
|
$267.0
|
-$11.9
|
|
Expense to Sales
|
44.3%
|
49.5%
|
-520 bps
|
|
Adjusted EBITDA
|
$10.7
|
$(12.9)
|
+$23.6
|
|
EBITDA to Sales
|
1.9%
|
(2.4)%
|
+430 bps
|
|
Non-GAAP loss
per diluted share |
$(0.08)
|
$(0.36)
|
+$0.28
|
> 22
Financial Review - Fiscal Year 2010
*Refer to GAAP to non-GAAP reconciliation at
http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioarchives
|
($ in millions, except EPS)
|
2010
|
2009
|
Change
|
|
Net Sales
|
$2,061.8
|
$2,064.6
|
-10 bps
|
|
Same Store Sales
|
+3%
|
-13%
|
|
|
Gross Profit
|
$1,015.0
|
$1,023.6
|
-$8.6
|
|
Gross Margin
|
49.2%
|
49.6%
|
-40 bps
|
|
Total Operating
Expenses |
$1,033.2
|
$1,049.5
|
-$16.3
|
|
Expense to Sales
|
50.1%
|
50.8%
|
-70 bps
|
|
Adjusted EBITDA
|
$50.2
|
$50.5
|
-$0.3
|
|
EBITDA to Sales
|
2.4%
|
2.4%
|
- - -
|
|
Non-GAAP loss
per diluted share |
$(0.26)
|
$(0.52)
|
+$0.26
|
> 23
>Cash of $117 million
>$154 million available on our fully committed and
undrawn revolving line of credit
undrawn revolving line of credit
– Liquidity of $271 million
>Convertible debt
– $140 million of 1.125% convertible notes due 2014
– No financial covenants
– Repurchased $49.2 million (face value) for $38.3 million
during 2010
during 2010
Balance Sheet and Liquidity at January 29, 2011
> 24
> 2,064 stores at year end
> Capital for store growth being distorted to Lane Bryant
– 5-7 new, and 10-13 relocations for Lane Bryant and Lane
Bryant Outlet locations
Bryant Outlet locations
– Continue to migrate from unprofitable malls to lifestyle
strip centers
strip centers
> Eliminating negative EBITDA stores
– Generated $6 million in negative EBITDA in 2010
– 240 stores closing in 2011
– 30 Catherines outlet locations closing over next two years
Stores
> 25
SUMMARY
> 26
>Intensifying brand focus on each primary target
customer
customer
>Improve profitability at both the corporate and
brand level
brand level
>Increase inventory productivity
>Build a winning corporate culture by attracting
and retaining key talent
and retaining key talent
Summary
> 27
>In support of a cleaner environment, we have not
brought investor materials for distribution
brought investor materials for distribution
>Should you wish to have materials sent to you,
please request materials by visiting our website at
https://www.charmingshoppes.com/investors/cont
act/contactus.asp or by emailing us at
IR@charming.com
please request materials by visiting our website at
https://www.charmingshoppes.com/investors/cont
act/contactus.asp or by emailing us at
IR@charming.com
Investor Materials
> 28
Q & A
3rd Annual
CONSUMER CONFERENCE
CONSUMER CONFERENCE
March 30, 2011