UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 18, 2005
CHARMING SHOPPES, INC.
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(Exact name of registrant as specified in its charter)
PENNSYLVANIA 000-07258 23-1721355
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
450 WINKS LANE, BENSALEM, PA 19020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 245-9100
NOT APPLICABLE
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simul-
taneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement.
On December 1, 1998, Catherines, Inc., a wholly-owned indirect subsidiary of
Charming Shoppes, Inc., entered into a Merchant Services Agreement with Hurley
State Bank, now Citibank USA, N.A. (the "Bank") to provide an accounts
receivable proprietary credit card program for our Catherines brand (as
subsequently amended, the "Agreement"). Under the Agreement, the Bank reimbursed
us daily for sales generated by the Catherines credit card accounts. A copy of
the Agreement is attached as Exhibit 1 to Catherines Stores Corp. (SEC File No.
000-19372) Report on Form 10-Q for the quarter ended May 1, 1999. Additional
information regarding this agreement is included in "Part II, Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Part II, Item 8. Financial Statements and Supplementary Data;
Notes to Consolidated Financial Statements; Note 16. Asset Securitization" of
our Annual Report on Form 10-K for the fiscal year ended January 31, 2004.
On January 28, 2004, Catherines, Inc. exercised its rights under the Agreement
to terminate the Agreement and purchase the Catherines retail store credit card
accounts upon termination, subject to negotiation of a definitive purchase
agreement. On March 17, 2005, Spirit of America National Bank, a wholly-owned
indirect subsidiary of Charming Shoppes, Inc., Catherines, Inc. and the Bank
entered into a Purchase Agreement (dated as of March 14, 2005) whereby
Catherines, Inc. assigned its right to purchase the Catherines credit card
accounts to Spirit of America National Bank, and the Bank agreed to sell (and
Spirit of America National Bank agreed to purchase) the Catherines credit card
accounts. Under the Purchase Agreement, the purchase price is a sum equal to the
credit card balances on the credit card accounts at the closing date (subject to
reductions for certain re-aged and hardship accounts). The Purchase Agreement
contains usual and customary representations, warranties and indemnification
provisions.
Closing under the Purchase Agreement occurred on March 18, 2005, at which time
Spirit of America National Bank purchased from the Bank approximately 1,800,000
Catherines credit card accounts for approximately $57,000,000 in accordance with
the terms of the Purchase Agreement. Approximately $30,000,000 of the purchase
price was funded from a pre-funding account established for this purpose in
connection with the issuance of Series 2004-1 asset backed certificates under
our asset securitization program. Additional information regarding these
certificates is included in "Part I, Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations; Liquidity and Capital
Resources; Off-Balance-Sheet Financing" of our Report on Form10-Q for the
quarter ended October 30, 2004. The balance of the purchase price was obtained
from funds available to Spirit of America National Bank through collections on
existing securitization receivables. As of March 21, 2005, the credit card
accounts have been transferred and converted to Spirit of America National
Bank's processing system.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
Exhibit No Description
99 Purchase Agreement dated as of March 14, 2005 between
Citibank USA, N.A., Spirit of America National Bank and
Catherines, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHARMING SHOPPES, INC.
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(Registrant)
Date: March 21, 2005 /S/ERIC M. SPECTER
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Eric M. Specter
Executive Vice President
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No Description
99 Purchase Agreement dated as of March 14, 2005 between
Citibank USA, N.A., Spirit of America National Bank and
Catherines, Inc.