Now with 360 Charlotte Russe stores in 43 states and Puerto Rico, the young women's apparel retailer expects to open 40 new Charlotte Russe units during the fiscal year ending in September and at least 50 new stores in fiscal 2007. The company is continuing to fill in locations in existing markets, and sees particular opportunity in the Northeast and Northwest, said Mark Hoffman, president and CEO.
"Our deal flow is quite strong, and we have no concerns about building our brand well beyond the 600-store level," Hoffman said.
Charlotte Russe also will renovate a minimum of 25 stores next year, after renovating 23 units in fiscal 2006.
"By the end of fiscal 2007, we project at least 60% of our store base will be in our new 'bright-store format'," which features brighter lighting, hardwood floors, higher capacity fixtures and backlit jewelry walls, Hoffman said. Some renovated units might actually be smaller than the company's historic 7,000 square feet as they are "right-sized," Hoffman said.
Charlotte Russe also is in the process of divesting its Rampage stores, with 44 of its 64 units to be sold by the end of the month. Of the remainder, four will be converted to Charlotte Russe stores, 12 will be returned to their landlords during the fourth quarter. The rest are under review.
Even so, the company also is looking to add a new banner in the relatively near term, either by creating a chain or acquisition.
"We have some thoughts on the drawing board, but we haven't focused on that," Hoffman said. "We will stay focused on our core stores through the next two quarters. Next spring, we will be in a position to start talking about either a new start-up or an acquisition."
Net sales for continuing operations in the third quarter came to $163 million, up 32% from the third quarter last year. Comparable store sales at the Charlotte Russe stores increased 18.2% during the quarter, compared to a decrease of 2.5% for the third quarter of fiscal 2005. Net income from continuing operations was $8.8 million, up 153% from the previous year.
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