'Idol' plan for Charming Shoppes, amid earnings drop

After a year of sales and profit declines, plus-size-apparel retailer Charming Shoppes Inc. said yesterday that it would turn to American Idol to draw customers to its Lane Bryant clothing shops.

The Bensalem-based company, whose 2,121 stores also include Fashion Bug and Catherines outlets, said it planned to spend $4 million on Lane Bryant ads during the nationally televised talent competition in the coming weeks.

The marketing move, announced during a quarterly and year-end earnings call, comes as the company has closed stores nationwide and slashed costs while trying to cope with fewer customers. Charming Shoppes finished the last fiscal year with 152 fewer stores and said it would close an additional 100 to 120 in the year ahead.

The American Idol spots will run April 27 through May 18 on Tuesdays and Wednesdays - the two top-rated television-programming slots for women 25 to 54 years old, "which is perfectly aligned with our customer base," said Charming Shoppes' president and chief executive officer Jim Fogarty.

With any luck, the advertisements will help reverse steep sales declines for Lane Bryant: Revenue for stores open for at least a year fell 15 percent during the quarter ended Jan. 30, the company said. Same-store sales dropped 8 percent at Fashion Bug and 6 percent at Catherines.

Across the company, net quarterly sales declined 14.7 percent, to $539 million, compared with $631.9 million a year ago, largely due to store closings and a drop in sales at stores that remained open the full year.

Sales for the entire year also dropped - to about $2 billion, down $410 million compared with the prior year - and profit continued to suffer.

Charming Shoppes reported a $28 million quarterly loss, an improvement over the $114 million loss during the same quarter a year ago. The full-year loss was $78 million - less steep than the $255.3 million recorded the prior year.

"We are a work in process," said Fogarty, who was hired as CEO last year, after his predecessor was ousted in a proxy fight with activist investors. "Our work, though, may be beginning to pay off."

Fogarty has sought to sell assets, refinance debt, and hire new brand executives since bringing his skills as a turnaround expert to Charming Shoppes.

During the last eight weeks, as new clothing has hit the racks, comparable-store sales - a key indicator for retailers - have improved, he said: They were down 5 percent at Lane Bryant, 4 percent at Fashion Bug, and 1 percent at Catherines.

Company shares, which began the day at $6.71, closed at $5.59, down 16.57 percent, as investors reacted to the earnings news.