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Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.As retailers' selection of plus-sized clothing narrows, Charming Shoppes Inc. is stepping in to pick up the slack, or slacks.
In a consumer spending crunch, retailers including Old Navy, owned by Gap Inc., and AnnTaylor Stores Corp. are offering plus-size apparel only online. A spokeswoman for Ann Taylor said the move is due to low demand for the sizes in their stores.
Industry experts say it involves extra work and a different process for private-label retailers to produce plus-size clothing, generally size 14 or 16 and higher, because the clothing should be fitted differently, instead of just sized up.
But specialty retailer Charming Shoppes, of Bensalem, Pa., is revamping its core plus-size brands, with the help of new management led by recently hired Chief Executive and President James Fogarty, a turnaround specialist formerly with restructuring firm Alvarez & Marsal. Charming Shoppes' main brands are Lane Bryant and Catherines, along with Fashion Bug, which has both plus and misses sizes.
The company has moved to make Lane Bryant more fashion-conscious, which brand president Brian Woolf first saw as a risk. "We were almost afraid of the fashion side of the business," he said. "Now we're driving the business with fashion and trends."
The company also plans to produce more of the clothing it sells, which Mr. Woolf said he expects to happen over the next year.
About two-thirds of the U.S. is either overweight or obese, a significant demographic for retailers to direct away from their stores or even ignore. While growth in the numbers has leveled out over recent years, the average U.S. woman remains around 5'4" and 164 pounds, according to the Centers for Disease Control and Prevention.
Kat Fay, an analyst with market-research firm Mintel International Group Ltd., said the plus-size market is "grossly under-served."
"Women are not very happy with the selection," she said.
Consumer dissatisfaction, which has been a constant in the plus-size market, could leave room for retailers like Charming Shoppes to grab more of a fragmented market, said analysts. It is spearheading the effort with changes at Lane Bryant and Fashion Bug. At Fashion Bug, the store has limited its size selection from 6 to 30. And some experts say Lane Bryant's focus on fashion has started to pay off.
The brand's merchandise margin has improved despite a 13% drop in same-store sales in the first quarter, meaning that for the customers who do shop at the store, the company doesn't have to mark down its merchandise very far.
It is "the first glimpse this strategy is working," said Christopher Kim, an analyst with JP Morgan Securities, a unit of J.P. Morgan Chase & Co. But he rates the stock at neutral because the company's short-term results might be weak.
The company also said in its first-quarter conference call that it had inventory problems at Lane Bryant because of increased demand for more trendy items. Mr. Woolf said that a new advertising strategy had been more effective than expected, and the company has adapted.
"We've made our adjustments in terms of the product assortment going forward," he said.
But plus-size clothing has taken the biggest hit in consumer spending over the past year, falling 9.6%, according to a report by NPD Group Inc., compared with a 5.1% drop in all women's clothing. Mr. Kim says sales might have fallen not because the women don't want to shop, but because the women have fewer options because of cuts in size selection from retailers and department stores.
Charming Shoppes hopes to attract the shoppers that shy away from Lane Bryant's trendy fashion to its conservative brand, called Catherines. And for bargain hunters, the company is emphasizing low prices at Fashion Bug.
Credit: By Alexandra Scaggs
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