All Gussied Up At Charming Shoppesby
Liz Pierce shops hard. So hard that there have been times she has gotten thrown out of stores. That's because Pierce, pen and pad in hand, probes deep--checking on prices, inventories, and traffic. She's the retailing analyst at Stephens Inc., an investment firm in Little Rock. "In order to make sensible investment judgments, I visit stores of the companies I cover as often as I can," says Pierce.
The result: She finds offbeat retailers. One is Charming Shoppes (CHRS), operator of a strip-mall specialty-apparel chain with 1,251 outlets. A misbegotten merchandise strategy had kept sales lackluster and the company in the red. Sales fell from $1.3 billion in the year ended Jan. 31, 1996, to $1 billion the year following.
Enter new CEO Dorrit Bern, an ex-Sears women's wear vice-president, who has reorganized Charming Shoppes since her arrival in September, 1995. "The company under Dorrit is now in an offensive strategy in regaining customer confidence and building customer traffic," according to Pierce. She figures Charming Shoppes will be in the black and will earn 20 cents a share by Jan. 31, 1998, and 28 cents in fiscal 1999. Gross margins, she notes, have widened because of more full-price selling, lower markdowns, payroll cuts, and reduced buying costs. Pierce expects Charming Shoppes, now at 511/16 a share, to hit 15 in a year.