UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(RULE
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
PROXY
STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE
ACT OF 1934 (AMENDMENT
NO. )
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Filed
by the Registrant
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[X]
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Filed
by a Party other than Registrant
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[ ]
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Check
the
appropriate box:
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[ ]
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Preliminary
Proxy Statement.
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Confidential,
For Use of the Commission Only (as permitted by Rule
14a-6(e)(2)).
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Definitive
Proxy Statement.
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Definitive
Additional Materials.
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[X]
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Soliciting
Material Pursuant to Rule 14a-12.
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CHARMING
SHOPPES, INC.
(Name
of registration as specified in its charter)
Payment
of Filing Fee (Check the appropriate box)
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[X]
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No
fee required.
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Fee
computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction applies:
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3.
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is
calculated and state how it was determined):
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4.
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Proposed
maximum aggregate value of transaction:
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5.
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the
date of its filing.
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1.
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Amount
Previously Paid:
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2.
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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PROXY
COMMUNICATION STATEMENT:
Charming
Shoppes, Inc. and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from shareholders in connection
with
the Company’s 2008 Annual Meeting of Shareholders. The Company plans
to file a proxy statement with the Securities and Exchange Commission (“SEC”) in
connection with the solicitation of proxies for the Annual
Meeting. Information concerning persons who may be considered
participants in the solicitation of the Company’s shareholders under the rules
of the SEC is set forth in public filings filed by the Company with the SEC,
including its proxy statement relating to its 2007 Annual Meeting of
Shareholders, and will be set forth in its proxy statement relating to its
2008
Annual Meeting of Shareholders. These documents may be (currently or
when filed with the SEC) obtained free of charge at the SEC’s website at
http://www.sec.gov and the Company’s website at
http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-sec or
MacKenzie Partners at 1-800-322-2885 or via email at
proxy@mackenziepartners.com.
Charming Shoppes, Inc.
Investor Presentation
February 2008
2
Forward-Looking Statements
This
presentation
contains certain forward-looking statements concerning the Company's
operations,
performance, and financial condition. Such forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially from those indicated. Such risks and
uncertainties may include, but are not limited to: the failure to effectively implement the Company's plan for
performance, and financial condition. Such forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially from those indicated. Such risks and
uncertainties may include, but are not limited to: the failure to effectively implement the Company's plan for
consolidation
of the
Catherines Plus Sizes brand and a new organizational structure, the
failure
to
implement the Company's business plan for increased profitability and growth in the Company's retail
stores and direct-to-consumer segments, the failure of changes in management to achieve improvement
implement the Company's business plan for increased profitability and growth in the Company's retail
stores and direct-to-consumer segments, the failure of changes in management to achieve improvement
in
the Company's competitive position, the failure to successfully implement
the
Company's integration of
operations of, and the business plan for, Crosstown Traders, Inc., adverse changes in costs vital to catalog
operations of, and the business plan for, Crosstown Traders, Inc., adverse changes in costs vital to catalog
operations,
such as
postage, paper and acquisition of prospects, declining response rates
to
catalog
offerings, failure to maintain efficient and uninterrupted order-taking and fulfillment in our direct-to-consumer
offerings, failure to maintain efficient and uninterrupted order-taking and fulfillment in our direct-to-consumer
business,
changes in
or miscalculation of fashion trends, extreme or unseasonable weather
conditions,
economic
downturns,
escalation of energy costs, a weakness in overall consumer demand,
failure to
find
suitable
store
locations, increases in wage rates, the ability to hire and train associates,
trade and security
restrictions
and
political or financial instability in countries where goods are manufactured,
the interruption
of
merchandise flow from the Company's centralized distribution facilities,
competitive pressures, and the
adverse
effects of
natural disasters, war, acts of terrorism or threats of either, or
other armed
conflict, on
the
United States and international economies. These, and other risks and
uncertainties, are detailed in the
Company's
filings
with the Securities and Exchange Commission, including the Company's
Annual
Report
on
Form 10-K for the fiscal year ended February 3, 2007 and other Company
filings
with the Securities and
Exchange
Commission.
Charming Shoppes assumes no duty to update or revise its forward-looking
statements
even if
experience or future changes make it clear that any projected results
expressed
or
implied
therein will
not be realized.
3
Dorrit J. Bern
Chairman, CEO and President
Eric M. Specter
Executive Vice President and CFO
Steven R. Wishner
Sr. Vice President, Finance
Dorrit J. Bern
Chairman, CEO and President
Eric M. Specter
Executive Vice President and CFO
Steven R. Wishner
Sr. Vice President, Finance
4
A
Multi-Brand,
Multi-Channel Retailer
Focused On Plus Sizes
With $3 Billion In
Multi-Channel Retailer
Focused On Plus Sizes
With $3 Billion In
Annual
Sales
5
Today’s Presentation
•Business Specific Issues And Actions
•Challenging Retail And Economic
Environment
•Meeting The Retail And Economic
Challenges
•Summary
6
•Analyzing customer database in order to
more efficiently identify target customer
segments
>Deep dive on customer database to
enhance marketing strategy
•Grass-roots efforts at store level to
connect with core customers
•Changes made in executive
merchandising group
>Upgraded key merchandising positions
>Streamlined buying process to improve
reaction times
>Improved inventory turnover in seasonal
merchandise
•Negative sales trends in each of
our retail brands
•Decreases in store traffic
>Core credit customer base still
shopping our stores
>Non-core customers shopping less
frequently
•Rapidly changing buying
preferences of our customer
>Need more compelling merchandise
assortments
>Need to react more quickly to
changing consumer preferences
>Customer buying closer to need
>Customer viewing apparel as more
discretionary
Issues
Actions
Business Specific Issues And Actions
7
•New leadership in catalog business
•Overhaul of all catalogs in
merchandising and presentation
•Reduced amount of prospecting
•Higher penetration in e-commerce
>Identifying new targeted customers
for e-commerce
•Changes made throughout the year
have resulted in improvement in
catalog sales trends
•Declining response rates
in our catalog business
>Occurring in both the core
customer file and in
prospecting
Issues
Actions
Business Specific Issues And Actions
8
Challenging Retail And
Economic Environment
•Reduced consumer demand for women’s
moderate apparel
•Consumers' disposable income levels are
being eroded, resulting in constrained
purchasing behavior
9
Meeting The Retail And
Economic Challenges
•Focusing Management Attention on Core Brands
>Closure of Petite Sophisticate Retail concept
>Rationalized catalog titles
•Improving Lane Bryant Merchandising
>More fashion-basic product offerings
>Strengthened merchandise team
•Streamlining Operations
>Relocation of Catherines from Memphis to Bensalem
>13% reduction in corporate and field management positions
>Consolidation of marketing functions
•Closing 150 Underperforming Stores
>Primarily at the Fashion Bug brand
10
Meeting The Retail And
Economic Challenges
•Decreasing Capital Expenditures For FY 2009
>30% decrease from fiscal 2008 levels, mainly through a 50%
reduction of planned store openings
•Reducing Expenses
>Decreasing corporate and divisional overhead expenses
•Decreasing Inventory Levels
>Entering FY 2009 with less seasonal and clearance inventory
•Repurchasing Shares
>10.3 million shares repurchased in April 2007
>Repurchased 24 million shares or 19% of outstanding shares in
fiscal 2008
>New $200 million share repurchase program announced in
November 2007
11
*Management estimates
Financial Impact* Of
Recent Actions
•Streamlining Initiatives Are Projected To:
>Generate positive cash flow
>Result in approximately $28 million in
annualized savings
>Reduce capital expenditures by
approximately $43 million in fiscal 2009
>Result in $10.8 million after-tax
non-recurring charge
12
Summary
•Management team taking steps to improve
profitability
•Focusing on core businesses
>Closure of Petite Sophisticate Retail concept
•Streamlining operations
>Creation of Fashion Retail Group strengthens
management’s focus
•Improving product offering
•Managing expenses
•Generating positive cash flow
Charming Shoppes, Inc.
Investor Presentation
February 2008