Charming Shoppes said Friday that it is considering selling off its noncore catalogs to focus on its Lane Bryant, Catherines, and Fashion Bug brands. Charming Shoppes president/CEO Dorrit Bern, who is also chairman of the board, said in a release that the company has had inquiries from qualified third parties about the noncore titles.
The woman’s apparel manufacturer/marketer would not give further comment. Presumably its noncore catalogs include the Crosstown Traders apparel titles and food gifts merchant Figi’s. Acquired by Charming Shoppes in 2005, Crosstown Traders catalogs include Old Pueblo Traders, Intimate Appeal, Coward Shoe, Bedford Fair Lifestyles, Bedford Fair Shoestyles, Willow Ridge, Lew Magram, Brownstone Studio, and Monterey Bay Clothing Co.
Bensalem, PA-based Charming Shoppes, which has been under fire from institutional shareholders about the stock’s performance, is also trying to prevent a change in its board of directors. Two hedge funds with a stake in the company, Crescendo Partners and Myca Partners, have nominated candidates for the Charming Shoppes board of directors, which holds its election on May 8.
If Charming Shoppes hadn’t made the announcement about pursuing “strategic alternatives” for the noncore catalogs, its board of directors would have been more vulnerable, says Claire Gruppo, president of New York-based investment bank Gruppo, Levey & Co. “If you have activists saying they are going to put up three or four new board members for election, then the easiest thing to do is shore up the core business,” Gruppo says.
Richard Kestenbaum, a partner with New York-based financial advisory firm Triangle Capital, agrees: “When you’re under attack like Charming Shoppes is, you don’t want your non-core businesses to be distraction, and you tend to focus on the mother ship,” Kestenbaum says. “A company in that situation will always say it has to get the main event working, and considers everything outside that core to be a distraction.”