Charming Shoppes' Sales Gains Won't Keep the Competition at Bay
Don't call it a comeback -- not yet, anyway. Sans a CEO (James Fogarty stepped down in October) Charming Shoppes (CHRS) still managed to post better sales in the third quarter. Though not enough to push the balance sheet to profitability, it's an encouraging trend for the plus-size retailer's family of brands.
The recession hit Charming hard across the board. Though it still operates 2,094 Lane Bryant, Cacique, Fashion Bug and Catherines Plus Sizes stores, the retailer was battling losses in the first quarter this year partly due to 144 store closings in 2009. But comps and total net sales are finally up 3 percent and 1 percent respectively, while e-commerce sales continue to climb to new heights. The 40 percent increase in e-sales was no doubt spurred by Charming's recent moves to create community-based commerce sites such as Sonsi.com
Charming's COO Anthony Romano was sanguine about potential profitability through the end of the year but marketing and promotions continue apace while the chain searches for a new chief. Romano said that a combined increase in inventory between the company's Right Fit program's core pants assortment and intimate apparel means that even with a lot of stock, there is less risk of having to markdown what are essentially seasonless items.
Combined with Charming's recent launch of Loop 18 to play to curvy junior fashionistas, the social shopping initiative and the inventory strategy make up a sound plan for getting back into the black. However, what really might change its fortunes is a step out of the comfort zone.
Competition for extended sizes is getting fierce in many market segments. Juniors can easily shop at Torrid or Forever 21, while their older counterparts can buy stylish separates at Chico's (CHS). Yet while Lane Bryant used to be one of the only venues in town for women 35-55, other retailers are recognizing the potential to serve up chic threads in sizes over 14.
ASOS in particular, presents a potential challenge for Lane Bryant. The UK-based e-commerce giant just entered the U.S. market in September and promises to be a formidable player. With approximately 30 percent of sales coming from markets abroad -- the U.S. represents the biggest take at about 7 percent. With a massive and constantly updated assortment, free shipping and free returns, ASOS has the goods to make fashionistas of all sizes swoon.
But ASOS' CURVE collection is particularly noteworthy, not just because sizes go up to a U.S. 22. It's because the stuff is very of-the-moment and features fine construction and quality details. Take the ASOS CURVE "hooded military cape," (pictured right) for example. Constructed primarily of wool with nifty details such as epaulets and tab front closures, the piece is not only on-trend but it looks much more expensive than the $129.30 price suggests. And styling with other must-have items such as the French sailor shirt with shorts and tights - brilliant.
Lane Bryant doesn't have a comparable item (first problem) but its attempt at another au courant outerwear piece (DKNY Jeans moto jacket pictured right) carries a hefty $168 price tag for faux leather. No shopper, no matter what her size, wants to pay for a designer label that lacks quality. Shown with a shiny top and ponte pants it also lacks the edginess such an item should embody.
Charming would do well to concentrate some of its forthcoming efforts on design, as well as sourcing better fabrics and finishings, or face markdowns across all its merchandise when customers switch loyalties.
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