Charlotte Russe to Open 50 Stores After Rocky Second Quarter
Charlotte Russe Holding Inc. will open 50 stores in 2005, according to Mark A. Hoffman, president and chief executive officer of the San Diego–based company. Hoffman, who made the announcement April 21 during a conference call, said he hoped the new stores will be part of the cure for what ails the purveyor of young women’s fashions.
Charlotte Russe’s comparable-store sales decreased 3.1 percent during the second quarter of 2005, compared with the 3.5 percent increase reported for the second quarter of fiscal 2004. The company runs 305 Charlotte Russe stores specializing in juniors fashions and 67 Rampage stores retailing casual contemporary apparel.
The drop followed the exit of General Merchandise Manager Donna Derosiers, who resigned Dec. 6, amid plans for the company’s crucial Spring merchandise campaign.
“In the beginning of quarter, we had rewritten Spring receipts to address misses in color and trend,” Hoffman told analysts during the conference call. “These receipts flowed into stores late February and into March. We were unable to capitalize on sales early in quarter.”
Hoffman said Charlotte Russe was still on a quest to replace Derosiers. He forecast third-quarter earnings for comparable sales will be in the “negative low single digits” but said the company will start to earn a profit in June.
Charlotte Russe may be on the right track to reporting an improved performance by the summer, said Jeffrey van Sinderen, retail analyst with Los Angeles–based B. Riley & Co. “Charlotte Russe isn’t performing as bad as what some people might imply,” van Sinderen said. “If you look at gross margins, they improve year over year.”
Hoffman said 49 of the new stores will be Charlotte Russe shops and one will be a Rampage boutique. —Andrew Asch
