CHARMING
SHOPPES, INC.
|
(Exact
name of registrant as specified in its
charter)
|
PENNSYLVANIA
|
23-1721355
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
450
WINKS LANE, BENSALEM, PA 19020
|
(215)
245-9100
|
|
(Address
of principal executive offices) (Zip Code)
|
(Registrant’s
telephone number, including Area
Code)
|
NOT
APPLICABLE
|
(Former
name, former address, and former fiscal year, if changed since
last
report)
|
Large
Accelerated Filer x
|
Accelerated
Filer o
|
Non-accelerated
Filer o
|
Page
|
||
2
|
||
2
|
||
Condensed
Consolidated Balance Sheets
|
||
2
|
||
Condensed
Consolidated Statements of Operations and Comprehensive
Income
|
||
3
|
||
4
|
||
Condensed
Consolidated Statements of Cash Flows
|
||
5
|
||
6
|
||
1
|
||
21
|
||
23
|
||
24
|
||
25
|
||
34
|
||
38
|
||
39
|
||
40
|
||
40
|
||
40
|
||
41
|
||
41
|
||
41
|
||
42
|
||
43
|
||
45
|
||
46
|
November
3,
|
February
3,
|
|||||||
(In
thousands, except share amounts)
|
2007
|
2007
|
||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ |
36,389
|
$ |
143,838
|
||||
Available-for-sale
securities
|
26,919
|
1,997
|
||||||
Accounts
receivable, net of allowances of $1,440 and $5,083
|
3,559
|
33,366
|
||||||
Investment
in asset-backed securities
|
113,458
|
60,643
|
||||||
Merchandise
inventories
|
498,196
|
429,433
|
||||||
Deferred
advertising
|
32,130
|
21,707
|
||||||
Deferred
taxes
|
5,232
|
4,469
|
||||||
Prepayments
and other
|
145,073
|
145,385
|
||||||
Total
current assets
|
860,956
|
840,838
|
||||||
Property,
equipment, and leasehold improvements – at cost
|
1,095,772
|
996,430
|
||||||
Less
accumulated depreciation and amortization
|
630,414
|
573,984
|
||||||
Net
property, equipment, and leasehold improvements
|
465,358
|
422,446
|
||||||
Trademarks
and other intangible assets
|
247,171
|
249,490
|
||||||
Goodwill
|
152,811
|
153,370
|
||||||
Other
assets
|
68,252
|
44,798
|
||||||
Total
assets
|
$ |
1,794,548
|
$ |
1,710,942
|
||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ |
194,407
|
$ |
178,629
|
||||
Accrued
expenses
|
192,321
|
190,702
|
||||||
Current
portion – long-term debt
|
9,239
|
10,887
|
||||||
Total
current liabilities
|
395,967
|
380,218
|
||||||
Deferred
taxes
|
66,206
|
57,340
|
||||||
Other
non-current liabilities
|
160,666
|
144,722
|
||||||
Long-term
debt
|
305,658
|
181,124
|
||||||
Stockholders’
equity
|
||||||||
Common
stock $.10 par value:
|
||||||||
Authorized
– 300,000,000 shares
|
||||||||
Issued
– 151,374,836 shares and 135,762,531 shares
|
15,137
|
13,576
|
||||||
Additional
paid-in capital
|
406,372
|
285,159
|
||||||
Treasury
stock at cost – 34,224,114 shares and 12,265,993 shares
|
(324,425 | ) | (84,136 | ) | ||||
Accumulated
other comprehensive income
|
18
|
1
|
||||||
Retained
earnings
|
768,949
|
732,938
|
||||||
Total
stockholders’ equity
|
866,051
|
947,538
|
||||||
Total
liabilities and stockholders’ equity
|
$ |
1,794,548
|
$ |
1,710,942
|
||||
Certain
prior-year amounts have been reclassified to conform to the current-year
presentation.
|
||||||||
See
Notes to Condensed Consolidated Financial
Statements
|
Thirteen
Weeks Ended
|
||||||||
November
3,
|
October
28,
|
|||||||
(In
thousands, except per share amounts)
|
2007
|
2006
|
||||||
Net
sales
|
$ |
669,389
|
$ |
695,278
|
||||
Cost
of goods sold, buying, catalog, and occupancy expenses
|
486,519
|
480,818
|
||||||
Selling,
general, and administrative expenses
|
187,996
|
183,435
|
||||||
Total
operating expenses
|
674,515
|
664,253
|
||||||
Income/(loss)
from operations
|
(5,126 | ) |
31,025
|
|||||
Other
income
|
2,686
|
2,074
|
||||||
Interest
expense
|
(2,206 | ) | (3,540 | ) | ||||
Income/(loss)
before income taxes
|
(4,646 | ) |
29,559
|
|||||
Income
tax provision/(benefit)
|
(1,078 | ) |
10,202
|
|||||
Net
income/(loss)
|
(3,568 | ) |
19,357
|
|||||
Other
comprehensive income, net of tax
|
||||||||
Unrealized
gain on available-for-sale securities,
|
||||||||
net
of income tax provision of $8
in 2007
|
15
|
0
|
||||||
Comprehensive
income/(loss)
|
$ | (3,553 | ) | $ |
19,357
|
|||
Basic
net income/(loss) per share
|
$ | (.03 | ) | $ |
.16
|
|||
Diluted
net income/(loss) per share
|
$ | (.03 | ) | $ |
.15
|
|||
Certain
prior-year amounts have been reclassified to conform to the current-year
presentation.
|
||||||||
See
Notes to Condensed Consolidated Financial
Statements
|
Thirty-nine
Weeks Ended
|
||||||||
November
3,
|
October
28,
|
|||||||
(In
thousands, except per share amounts)
|
2007
|
2006
|
||||||
Net
sales
|
$ |
2,225,026
|
$ |
2,193,553
|
||||
Cost
of goods sold, buying, catalog, and occupancy expenses
|
1,584,048
|
1,516,490
|
||||||
Selling,
general, and administrative expenses
|
574,885
|
541,468
|
||||||
Total
operating expenses
|
2,158,933
|
2,057,958
|
||||||
Income
from operations
|
66,093
|
135,595
|
||||||
Other
income
|
7,787
|
6,488
|
||||||
Interest
expense
|
(8,287 | ) | (11,475 | ) | ||||
Income
before income taxes
|
65,593
|
130,608
|
||||||
Income
tax provision
|
24,584
|
46,627
|
||||||
Net
income
|
41,009
|
83,981
|
||||||
Other
comprehensive income, net of tax
|
||||||||
Unrealized
gain on available-for-sale securities,
|
||||||||
net
of income tax provision of
$11 in 2007 and $3 in 2006
|
17
|
4
|
||||||
Comprehensive
income
|
$ |
41,026
|
$ |
83,985
|
||||
Basic
net income per share
|
$ |
.33
|
$ |
.69
|
||||
Diluted
net income per share
|
$ |
.32
|
$ |
.63
|
||||
Certain
prior-year amounts have been reclassified to conform to the current-year
presentation.
|
||||||||
See
Notes to Condensed Consolidated Financial
Statements
|
Thirty-nine
Weeks Ended
|
||||||||
November
3,
|
October
28,
|
|||||||
(In
thousands)
|
2007
|
2006
|
||||||
Operating
activities
|
||||||||
Net
income
|
$ |
41,009
|
$ |
83,981
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||
Depreciation
and amortization
|
69,492
|
66,431
|
||||||
Stock-based
compensation
|
8,494
|
7,603
|
||||||
Deferred
income taxes
|
8,856
|
(9,713 | ) | |||||
Excess
tax benefits related to stock-based compensation
|
(847 | ) | (2,635 | ) | ||||
Net
loss from disposition of capital assets
|
1,926
|
849
|
||||||
Net
gain from securitization activities
|
(7,486 | ) | (1,139 | ) | ||||
Changes
in operating assets and liabilities
|
||||||||
Accounts
receivable, net
|
29,807
|
36,583
|
||||||
Merchandise
inventories
|
(68,763 | ) | (105,040 | ) | ||||
Accounts
payable
|
15,778
|
74,330
|
||||||
Deferred
advertising
|
(10,423 | ) | (5,617 | ) | ||||
Prepayments
and other
|
(591 | ) | (17,932 | ) | ||||
Income
taxes payable
|
0
|
10,998
|
||||||
Accrued
expenses and other
|
16,853
|
2,135
|
||||||
Purchase
of Lane Bryant credit card receivables portfolio
|
(230,975 | ) |
0
|
|||||
Securitization
of Lane Bryant credit card receivables portfolio
|
230,975
|
0
|
||||||
Net
cash provided by operating activities
|
104,105
|
140,834
|
||||||
Investing
activities
|
||||||||
Investment
in capital assets
|
(108,775 | ) | (92,524 | ) | ||||
Gross
purchases of securities
|
(73,089 | ) | (33,472 | ) | ||||
Proceeds
from sales of securities
|
3,777
|
52,540
|
||||||
Increase
in other assets
|
(17,225 | ) | (7,417 | ) | ||||
Net
cash used by investing activities
|
(195,312 | ) | (80,873 | ) | ||||
Financing
activities
|
||||||||
Proceeds
from short-term borrowings
|
9,527
|
142,212
|
||||||
Repayments
of short-term borrowings
|
(9,527 | ) | (192,212 | ) | ||||
Proceeds
from issuance of senior convertible notes
|
275,000
|
0
|
||||||
Proceeds
from long-term borrowings
|
986
|
0
|
||||||
Repayments
of long-term borrowings
|
(9,044 | ) | (11,491 | ) | ||||
Payments
of deferred financing costs
|
(7,611 | ) |
0
|
|||||
Excess
tax benefits related to stock-based compensation
|
847
|
2,635
|
||||||
Purchase
of hedge on senior convertible notes
|
(90,475 | ) |
0
|
|||||
Sale
of common stock warrants
|
53,955
|
0
|
||||||
Purchases
of treasury stock
|
(240,289 | ) |
0
|
|||||
Net
proceeds from shares issued under employee stock
plans
|
389
|
7,001
|
||||||
Net
cash used by financing activities
|
(16,242 | ) | (51,855 | ) | ||||
Increase/(decrease) in
cash and cash equivalents
|
(107,449 | ) |
8,106
|
|||||
Cash
and cash equivalents, beginning of period
|
143,838
|
130,132
|
||||||
Cash
and cash equivalents, end of period
|
$ |
36,389
|
$ |
138,238
|
||||
Non-cash
financing and investing activities
|
||||||||
Common
stock issued on redemption of convertible notes
|
$ |
149,564
|
$ |
0
|
||||
Assets
acquired through capital leases
|
$ |
5,509
|
$ |
0
|
||||
Certain
prior-year amounts have been reclassified to conform to the current-year
presentation.
|
||||||||
See
Notes to Condensed Consolidated Financial
Statements
|
2004
Stock Award and Incentive Plan
|
3,915,252
|
|||
2003
Non-Employee Directors Compensation Plan
|
122,968
|
|||
1994
Employee Stock Purchase Plan
|
1,072,687
|
|||
1988
Key Employee Stock Option Plan
|
105,055
|
Aggregate
|
||||||||||||||||||||||||
Average
|
Intrinsic
|
|||||||||||||||||||||||
Option
|
Option
|
Option
Prices
|
Value(1)
|
|||||||||||||||||||||
Shares
|
Price
|
Per
Share
|
(000’s)
|
|||||||||||||||||||||
Outstanding
at February 3, 2007
|
2,217,790
|
$ |
5.82
|
$ |
1.00
|
–
|
$ |
13.84
|
$ |
16,473
|
||||||||||||||
Granted
– option price less than market price
|
18,000
|
1.00
|
1.00
|
–
|
1.00
|
|||||||||||||||||||
Canceled/forfeited
|
(7,502 | ) |
4.08
|
1.00
|
–
|
11.28
|
||||||||||||||||||
Exercised
|
(148,181 | ) |
5.26
|
1.00
|
–
|
8.46
|
884 | (2) | ||||||||||||||||
Outstanding
at November 3, 2007
|
2,080,107
|
$ |
5.82
|
$ |
1.00
|
–
|
$ |
13.84
|
$ |
2,092
|
||||||||||||||
Exercisable
at November 3, 2007
|
2,015,680
|
$ |
5.98
|
$ |
1.00
|
–
|
$ |
13.84
|
$ |
1,717
|
||||||||||||||
____________________
|
||||||||||||||||||||||||
(1)
Aggregate market value less aggregate exercise price.
|
||||||||||||||||||||||||
(2)
As of date of exercise.
|
Thirteen
Weeks Ended
|
Thirty-nine
Weeks Ended
|
|||||||||||||||
November
3,
|
October
28,
|
November
3,
|
October
28,
|
|||||||||||||
(In
thousands)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Total
stock-based compensation expense
|
$ |
734
|
$ |
2,588
|
$ |
8,494
|
$ |
7,603
|
Thirty-nine
Weeks Ended
|
||||||||||||||||
Balance
at
|
November
3, 2007
|
Balance
at
|
||||||||||||||
February
3,
|
Payments/
|
November
3,
|
||||||||||||||
(In
thousands)
|
2007
|
Adjustments
|
Settlements
|
2007
|
||||||||||||
Lease
termination and related costs
|
$ |
1,820
|
$ | (746 | ) | $ | (1,074 | ) | $ |
0
|
||||||
Other
costs
|
239
|
(153 | ) | (86 | ) |
0
|
||||||||||
Total
|
$ |
2,059
|
$ | (899 | ) | $ | (1,160 | ) | $ |
0
|
November
3,
|
February
3,
|
|||||||
(In
thousands)
|
2007
|
2007
|
||||||
Due
from customers
|
$ |
4,999
|
$ |
38,449
|
||||
Allowance
for doubtful accounts
|
(1,440 | ) | (5,083 | ) | ||||
Net
accounts receivable
|
$ |
3,559
|
$ |
33,366
|
November
3,
|
February
3,
|
|||||||
(In
thousands)
|
2007
|
2007
|
||||||
Trademarks,
tradenames, and internet domain names
|
$ |
241,988
|
$ |
241,850
|
||||
Customer
lists, customer relationships, and covenant not to compete
|
16,400
|
16,400
|
||||||
Total
at cost
|
258,388
|
258,250
|
||||||
Less
accumulated amortization of customer lists, customer
|
||||||||
relationships,
and covenant not
to compete
|
11,217
|
8,760
|
||||||
Net
trademarks and other intangible assets
|
$ |
247,171
|
$ |
249,490
|
November
3,
|
February
3,
|
|||||||
(In
thousands)
|
2007
|
2007
|
||||||
1.125%
Senior Convertible Notes, due May 2014
|
$ |
275,000
|
$ |
0
|
||||
4.75%
Senior Convertible Notes, due June 2012(1)
|
0
|
149,999
|
||||||
Capital
lease obligations
|
12,876
|
12,853
|
||||||
6.07%
mortgage note, due October 2014
|
11,235
|
11,696
|
||||||
6.53%
mortgage note, due November 2012
|
7,000
|
8,050
|
||||||
7.77%
mortgage note, due December 2011
|
8,051
|
8,496
|
||||||
Other
long-term debt
|
735
|
917
|
||||||
Total
long-term debt
|
314,897
|
192,011
|
||||||
Less
current portion
|
9,239
|
10,887
|
||||||
Long-term
debt
|
$ |
305,658
|
$ |
181,124
|
||||
____________________
|
||||||||
(1)
On April 30, 2007, we called these notes for redemption on June 4,
2007
(see below).
|
Thirty-nine
|
||||
Weeks
Ended
|
||||
November
3,
|
||||
(Dollars
in thousands)
|
2007
|
|||
Total
stockholders’ equity, beginning of period
|
$ |
947,538
|
||
Cumulative
effect of adoption of FIN No. 48(1)
|
(4,998 | ) | ||
Net
income
|
41,009
|
|||
Net
proceeds from shares issued under employee stock plans (466,749
shares)
|
389
|
|||
Purchase
of treasury shares (21,958,121 shares)
|
(240,289 | ) | ||
Common
stock issued on redemption of convertible notes (15,145,556
shares)
|
149,564
|
|||
Sale
of common stock warrants(2)
|
53,955
|
|||
Purchase
of common stock call options(2)
|
(90,475 | ) | ||
Stock-based
compensation expense
|
8,494
|
|||
Excess
tax benefits related to stock-based compensation
|
847
|
|||
Unrealized
gain on available-for-sale securities, net of tax
|
17
|
|||
Total
stockholders’ equity, end of period
|
$ |
866,051
|
||
____________________
|
||||
(1)
See “Note
8. Income
Taxes” below.
|
||||
(2)
See “Note
4. Long-term
Debt” above.
|
Thirteen
Weeks Ended
|
Thirty-nine
Weeks Ended
|
|||||||||||||||
November
3,
|
October
28,
|
November
3,
|
October
28,
|
|||||||||||||
(In
thousands, except per share amounts)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
Basic
weighted average common shares outstanding
|
121,196
|
122,586
|
122,688
|
122,174
|
||||||||||||
Dilutive
effect of assumed conversion of
|
||||||||||||||||
4.75%
Senior Convertible
Notes
|
0 | (1) |
15,182
|
6,674 | (1) |
15,182
|
||||||||||
Dilutive
effect of stock options and awards
|
0 | (2) |
2,164
|
1,478
|
2,215
|
|||||||||||
Diluted
weighted average common shares
|
||||||||||||||||
and
equivalents
outstanding
|
121,196
|
139,932
|
130,840
|
139,571
|
||||||||||||
Net
income/(loss)
|
$ | (3,568 | ) | $ |
19,357
|
$ |
41,009
|
$ |
83,981
|
|||||||
Decrease
in interest expense from assumed
|
||||||||||||||||
conversion
of 4.75% Senior
Convertible
|
||||||||||||||||
Notes,
net of income
taxes
|
0 | (1) |
1,128
|
1,476 | (1) |
3,385
|
||||||||||
Net
income/(loss) used to determine diluted
|
||||||||||||||||
net
income/(loss) per
share
|
$ | (3,568 | ) | $ |
20,485
|
$ |
42,485
|
$ |
87,366
|
|||||||
Options
with weighted average exercise price
|
||||||||||||||||
greater
than market price, excluded from
|
||||||||||||||||
computation
of net income/(loss) per share:
|
||||||||||||||||
Number
of shares
|
193
|
1
|
77
|
1
|
||||||||||||
Weighted
average exercise price per share
|
$ |
7.71
|
$ |
13.84
|
$ |
9.30
|
$ |
13.84
|
||||||||
____________________
|
||||||||||||||||
(1)
The notes were converted or redeemed on June 4, 2007 (see “Note 4.
Long-term Debt” above).
|
||||||||||||||||
(2)
All stock options and awards are excluded from the computation of
diluted
net loss per share as their effect would have been
anti-dilutive.
|
Retail
|
Direct-to-
|
Corporate
|
||||||||||||||
(In
thousands)
|
Stores
|
Consumer
|
and
Other
|
Consolidated
|
||||||||||||
Thirteen
weeks ended November 3, 2007
|
||||||||||||||||
Net
sales
|
$ |
588,777
|
$ |
78,979
|
$ |
1,633
|
$ |
669,389
|
||||||||
Depreciation
and amortization
|
15,678
|
401
|
7,157
|
23,236
|
||||||||||||
Loss
before interest and income taxes
|
32,586
|
(4,529 | ) | (30,497 | ) | (2,440 | ) | |||||||||
Interest
expense
|
(2,206 | ) | (2,206 | ) | ||||||||||||
Income
tax benefit
|
1,078
|
1,078
|
||||||||||||||
Net
loss
|
32,586
|
(4,529 | ) | (31,625 | ) | (3,568 | ) | |||||||||
Capital
expenditures
|
27,672
|
1,484
|
5,603
|
34,759
|
||||||||||||
Thirty-nine
weeks ended November 3, 2007
|
||||||||||||||||
Net
sales
|
$ |
1,960,754
|
$ |
259,044
|
$ |
5,228
|
$ |
2,225,026
|
||||||||
Depreciation
and amortization
|
42,459
|
1,125
|
25,908
|
69,492
|
||||||||||||
Income
before interest and income taxes
|
177,430
|
(7,440 | ) | (96,110 | ) |
73,880
|
||||||||||
Interest
expense
|
(8,287 | ) | (8,287 | ) | ||||||||||||
Income
tax provision
|
(24,584 | ) | (24,584 | ) | ||||||||||||
Net
income
|
177,430
|
(7,440 | ) | (128,981 | ) |
41,009
|
||||||||||
Capital
expenditures
|
83,264
|
2,294
|
23,217
|
108,775
|
Retail
|
Direct-to-
|
Corporate
|
||||||||||||||
(In
thousands)
|
Stores
|
Consumer
|
and
Other
|
Consolidated
|
||||||||||||
Thirteen
weeks ended October 28, 2006
|
||||||||||||||||
Net
sales
|
$ |
615,321
|
$ |
79,826
|
$ |
131
|
$ |
695,278
|
||||||||
Depreciation
and amortization
|
10,216
|
718
|
10,368
|
21,302
|
||||||||||||
Income
before interest and income taxes
|
58,974
|
346
|
(26,221 | ) |
33,099
|
|||||||||||
Interest
expense
|
(3,540 | ) | (3,540 | ) | ||||||||||||
Income
tax provision
|
(10,202 | ) | (10,202 | ) | ||||||||||||
Net
income
|
58,974
|
346
|
(39,963 | ) |
19,357
|
|||||||||||
Capital
expenditures
|
25,953
|
2,033
|
9,567
|
37,553
|
||||||||||||
Thirty-nine
weeks ended October 28, 2006
|
||||||||||||||||
Net
sales
|
$ |
1,912,533
|
$ |
279,579
|
$ |
1,441
|
$ |
2,193,553
|
||||||||
Depreciation
and amortization
|
36,693
|
1,285
|
28,453
|
66,431
|
||||||||||||
Income
before interest and income taxes
|
206,642
|
8,416
|
(72,975 | ) |
142,083
|
|||||||||||
Interest
expense
|
(11,475 | ) | (11,475 | ) | ||||||||||||
Income
tax provision
|
(46,627 | ) | (46,627 | ) | ||||||||||||
Net
income
|
206,642
|
8,416
|
(131,077 | ) |
83,981
|
|||||||||||
Capital
expenditures
|
64,064
|
3,221
|
25,239
|
92,524
|
·
|
Our
business is dependent upon our ability to accurately predict rapidly
changing fashion trends, customer preferences, and other fashion-related
factors, which we may not be able to successfully accomplish in the
future.
|
·
|
Our
business plan is largely dependent upon continued growth in the plus-size
women’s apparel market, which may not
occur.
|
·
|
A
slowdown in the United States economy, an uncertain economic outlook,
and
escalating energy costs could lead to reduced consumer demand for
our
products in the future.
|
·
|
The
women’s specialty retail apparel and direct-to-consumer markets are highly
competitive and we may be unable to compete successfully against
existing
or future competitors.
|
·
|
We
depend on key personnel, particularly our Chief Executive Officer,
Dorrit
J. Bern, and we may not be able to retain or replace these employees
or
recruit additional qualified
personnel.
|
·
|
We
depend on our distribution and fulfillment centers and third-party
freight
consolidators and service providers, and could incur significantly
higher
costs and longer lead times associated with distributing our products
to
our stores and shipping our products to our E-commerce and catalog
customers if operations at any of these locations were to be disrupted
for
any reason.
|
·
|
Natural
disasters, as well as war, acts of terrorism, or other armed conflict,
or
the threat of either may negatively impact availability of merchandise
and
customer traffic to our stores, or otherwise adversely affect our
business.
|
·
|
Our
manufacturers may be unable to manufacture and deliver merchandise
to us
in a timely manner or to meet our quality
standards.
|
·
|
We
rely significantly on foreign sources of production and face a variety
of
risks generally associated with doing business in foreign markets
and
importing merchandise from abroad. Such risks include (but are not
necessarily limited to) political instability; imposition of, or
changes
in, duties or quotas; trade restrictions; increased security requirements
applicable to imports; delays in shipping; increased costs of
transportation; and issues relating to compliance with domestic or
international labor standards.
|
·
|
We
depend on the availability of credit for our working capital needs,
including credit we receive from our suppliers and their agents,
and on
our credit card securitization
facilities.
|
·
|
We
may be unable to obtain adequate insurance for our operations at
a
reasonable cost.
|
·
|
We
may be unable to protect our trademarks and other intellectual property
rights, which are important to our success and our competitive
position.
|
·
|
Inadequate
systems capacity, a disruption or slowdown in telecommunications
services,
changes in technology, changes in government regulations, systems
issues,
security breaches, a failure to integrate order management systems,
or
customer privacy issues could result in reduced sales or increases
in
operating expenses as a result of our efforts or our inability to
remedy
such issues.
|
·
|
We
cannot assure the successful implementation of our business plan
for
increased profitability and growth in our Retail Stores or
Direct-to-Consumer segments. Recent changes in management may fail to
achieve improvement in our operating results. We cannot assure
the realization of our anticipated annual expense savings from
the consolidation of operations and new organizational
structure at our CATHERINES brand.
|
·
|
We
may be unable to successfully implement our plan to improve merchandise
assortments in our Retail Stores or Direct-to-Consumer
segments.
|
·
|
Our
Retail Stores and Direct-to-Consumer segments experience seasonal
fluctuations in net sales and operating income. Any decrease in
sales or margins during our peak sales periods, or in the availability
of
working capital during the months preceding such periods, could have
a
material adverse effect on our business. In addition, extreme or
unseasonable weather conditions may have a negative impact on our
sales.
|
·
|
We
may be unable to hire and retain a sufficient number of suitable
sales
associates at our stores. In addition, we are subject to the
Fair Labor Standards Act and various state and Federal laws and
regulations governing such matters as minimum wages, exempt status
classification, overtime, and employee benefits. Changes in
Federal or state laws or regulations regarding minimum wages or other
employee benefits could cause us to incur additional wage and benefit
costs, which could adversely affect our results of
operations.
|
·
|
Our
Retail Stores segment sales are dependent upon a high volume of traffic
in
the strip centers and malls in which our stores are located, and
our
future retail store growth is dependent upon the availability of
suitable
locations for new stores.
|
·
|
We
cannot assure the successful implementation of our business plans
for our
outlet store distribution channel and expansion of our CACIQUE® product
line
through new store formats.
|
·
|
We
cannot assure the realization of our anticipated benefits from the
re-launch of our LANE BRYANT credit card
program.
|
·
|
We
cannot assure the successful implementation of our business plan
for
Crosstown Traders, including the successful launch of our LANE BRYANT
catalog.
|
·
|
Successful
operation of our E-commerce websites and our catalog business is
dependent
on our ability to maintain efficient and uninterrupted customer service
and fulfillment operations.
|
·
|
We
may be unable to manage significant increases in certain costs vital
to
catalog operations, including postage, paper, and acquisition of
prospects, which could adversely affect our results of
operations.
|
·
|
Response
rates to our catalogs and access to new customers could decline,
which
would adversely affect our net sales and results of
operations.
|
·
|
We
make certain significant assumptions, estimates, and projections
related
to the useful lives of our property, plant, and equipment and the
valuation of intangible assets related to acquisitions. The carrying
amount and/or useful life of these assets are subject to periodic
valuation tests for impairment. Impairment results when the carrying
value of an asset exceeds the undiscounted (or for goodwill and
indefinite-lived intangible assets the discounted) future cash flows
associated with the asset. If actual experience were to differ
materially from the assumptions, estimates, and projections used
to
determine useful lives or the valuation of property, plant, equipment,
or
intangible assets, a write-down for impairment of the carrying value
of
the assets, or acceleration of depreciation or amortization of the
assets,
could result. Such a write-down or acceleration of depreciation or
amortization would have an adverse impact on our reported results
of
operations.
|
·
|
Changes
to existing accounting rules or the adoption of new rules could have
an
adverse impact on our reported results of
operations.
|
·
|
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we are required
to
include our assessment of the effectiveness of our internal control
over
financial reporting in our annual reports. Our independent
registered public accounting firm is also required to report on
whether or not they believe that we maintained, in all material respects,
effective internal control over financial reporting. If we are
unable to maintain effective internal control over financial reporting
we
could be subject to regulatory sanctions and a possible loss of public
confidence in the reliability of our financial reporting. Such a
failure could result in our inability to provide timely and/or reliable
financial information and could adversely affect our
business.
|
·
|
The
holders of our 1.125% Senior Convertible Notes due May 1, 2014 (the
“1.125% Notes”) could require us to repurchase the principal amount of the
notes for cash before maturity of the notes under certain circumstances
(see “Notes to Condensed Consolidated Financial Statements; Note
4. Long-term Debt” above). Such a repurchase would
require significant amounts of cash and could adversely affect our
financial condition.
|
·
|
The
Financial Accounting Standards Board (“FASB”) has issued a proposed Staff
Position (“FSP”) that, if adopted, would apply to any convertible debt
instrument that may be settled in whole or in part with cash upon
conversion, which would include our 1.125% Notes. We would be
required to adopt the proposal as of February 3, 2008 (the beginning
of
Fiscal 2009), with retrospective application to financial statements
for
periods prior to the date of adoption. As compared to our
current accounting for the 1.125% Notes, adoption of the proposal
would
reduce long-term debt, increase stockholders’ equity, and reduce net
income and earnings per share. Adoption of the proposal would
not affect our cash flows.
|
Percentage
|
Percentage
|
|||||||||||||||||||||||
Thirteen
Weeks Ended(1)
|
Change
|
Thirty-nine
Weeks Ended(1)
|
Change
|
|||||||||||||||||||||
November
3,
|
October
28,
|
From
Prior
|
November
3,
|
October
28,
|
From
Prior
|
|||||||||||||||||||
2007
|
2006
|
Period
|
2007
|
2006
|
Period
|
|||||||||||||||||||
Net
sales
|
100.0 | % | 100.0 | % | (3.7 | )% | 100.0 | % | 100.0 | % | 1.4 | % | ||||||||||||
Cost
of goods sold, buying,
|
||||||||||||||||||||||||
catalog, and
occupancy
expenses
|
72.7
|
69.2
|
1.2
|
71.2
|
69.1
|
4.5
|
||||||||||||||||||
Selling,
general, and
|
||||||||||||||||||||||||
administrative
expenses
|
28.1
|
26.4
|
2.5
|
25.8
|
24.7
|
6.2
|
||||||||||||||||||
Income/(loss)
from operations
|
(0.8 | ) |
4.5
|
(116.5 | ) |
3.0
|
6.2
|
(51.3 | ) | |||||||||||||||
Other
income
|
0.4
|
0.3
|
29.5
|
0.3
|
0.3
|
20.0
|
||||||||||||||||||
Interest
expense
|
0.3
|
0.5
|
(37.7 | ) |
0.4
|
0.5
|
(27.8 | ) | ||||||||||||||||
Income
tax provision/(benefit)
|
(0.2 | ) |
1.5
|
(110.6 | ) |
1.1
|
2.1
|
(47.3 | ) | |||||||||||||||
Net
income/(loss)
|
(0.5 | ) |
2.8
|
(118.4 | ) |
1.8
|
3.8
|
(51.2 | ) | |||||||||||||||
____________________
|
||||||||||||||||||||||||
(1)
Results may not add due to rounding.
|
Thirteen
Weeks Ended
|
Thirty-nine
Weeks Ended
|
|||||||||||||||
November
3,
|
October
28,
|
November
3,
|
October
28,
|
|||||||||||||
(In
millions)
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
FASHION
BUG
|
$ |
221.6
|
$ |
240.7
|
$ |
761.8
|
$ |
789.2
|
||||||||
LANE
BRYANT(1)
|
279.7
|
287.0
|
907.5
|
845.2
|
||||||||||||
CATHERINES
|
82.2
|
85.7
|
276.3
|
276.2
|
||||||||||||
Other
retail stores(2)
|
5.3
|
1.9
|
15.2
|
1.9
|
||||||||||||
Total
Retail Stores segment
sales
|
588.8
|
615.3
|
1,960.8
|
1,912.5
|
||||||||||||
Total
Direct-to-Consumer segment sales
|
79.0
|
79.8
|
259.0
|
279.6
|
||||||||||||
Corporate
and other(3)
|
1.6
|
0.2
|
5.2
|
1.5
|
||||||||||||
Total
net
sales
|
$ |
669.4
|
$ |
695.3
|
$ |
2,225.0
|
$ |
2,193.6
|
||||||||
____________________
|
||||||||||||||||
(1)
Includes LANE BRYANT OUTLET stores, which began operations in July
2006.
|
||||||||||||||||
(2)
Includes PETITE SOPHISTICATE stores, which began operations in October
2007, and PETITE SOPHISTICATE OUTLET stores, which began operations
in
September 2006.
|
||||||||||||||||
(3)
Primarily revenue related to loyalty card fees.
|
FASHION
|
LANE
|
|||||||||||||||||||
BUG
|
BRYANT
|
CATHERINES
|
Other(1)
|
Total
|
||||||||||||||||
Fiscal
2008 Year-to-Date(2):
|
||||||||||||||||||||
Stores
at February 3, 2007
|
1,009
|
859
|
465
|
45
|
2,378
|
|||||||||||||||
Stores
opened
|
7
|
73 | (3) |
9
|
10
|
99
|
||||||||||||||
Stores
closed
|
(12 | ) | (10 | ) | (3 | ) | (0 | ) | (25 | ) | ||||||||||
Net
change in
stores
|
(5 | ) |
63
|
6
|
10
|
74
|
||||||||||||||
Stores
at November 3, 2007
|
1,004
|
922
|
471
|
55
|
2,452
|
|||||||||||||||
Stores
relocated during period
|
15
|
27
|
11
|
0
|
53
|
|||||||||||||||
Fiscal
2008:
|
||||||||||||||||||||
Planned
store openings(4)
|
8
|
79 | (5) |
9
|
11 | (6) |
107
|
|||||||||||||
Planned
store
closings
|
21
|
39
|
6
|
0
|
66
|
|||||||||||||||
Planned
store relocations(4)
|
15
|
45 | (7) |
11
|
0
|
71
|
||||||||||||||
____________________
|
||||||||||||||||||||
(1)
Includes PETITE SOPHISTICATE and PETITE SOPHISTICATE OUTLET
stores.
|
||||||||||||||||||||
(2)
Excludes 2 Crosstown Traders outlet stores that are included in our
Direct-to-Consumer segment.
|
||||||||||||||||||||
(3)
Includes 18 LANE BRYANT OUTLET stores and 37 LANE BRYANT intimate
apparel
side-by-side stores.
|
||||||||||||||||||||
(4)
Reflects reduced capital expenditures forecast (see “LIQUIDITY AND
CAPITAL RESOURCES; Capital Expenditures”
below).
|
||||||||||||||||||||
(5)
Includes approximately 19 LANE BRYANT OUTLET stores and 37 LANE BRYANT
intimate apparel side-by-side stores.
|
||||||||||||||||||||
(6)
Includes 4 PETITE SOPHISTICATE stores and 7 PETITE SOPHISTICATE OUTLET
stores.
|
||||||||||||||||||||
(7)
Includes approximately 27 conversions to LANE BRYANT intimate apparel
side-by-side stores.
|
Thirteen
Weeks Ended
|
Thirty-nine
Weeks Ended
|
|||||||||||||||
November
3,
|
October
28,
|
November
3,
|
October
28,
|
|||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Retail
Stores segment
|
||||||||||||||||
Increase
(decrease) in comparable store sales(1)
:
|
||||||||||||||||
Consolidated
retail stores
|
(8 | )% | 1 | % | (4 | )% | 1 | % | ||||||||
FASHION
BUG
|
(7 | ) |
0
|
(3 | ) | (1 | ) | |||||||||
LANE
BRYANT(3)
|
(9 | ) |
0
|
(5 | ) |
2
|
||||||||||
CATHERINES
|
(6 | ) |
4
|
(1 | ) |
4
|
||||||||||
Sales
from new stores as a percentage of total
|
||||||||||||||||
consolidated
prior-period
sales(2):
|
||||||||||||||||
FASHION
BUG
|
1
|
1
|
1
|
1
|
||||||||||||
LANE
BRYANT(3)
|
4
|
9
|
6
|
5
|
||||||||||||
CATHERINES
|
0
|
1
|
0
|
1
|
||||||||||||
Other
retail stores(4)
|
1
|
0
|
1
|
0
|
||||||||||||
Prior-period
sales from closed stores as a percentage
|
||||||||||||||||
of
total consolidated
prior-period sales:
|
||||||||||||||||
FASHION
BUG
|
(1 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||||
LANE
BRYANT
|
(1 | ) | (3 | ) | (1 | ) | (2 | ) | ||||||||
CATHERINES
|
(0 | ) | (0 | ) | (0 | ) | (1 | ) | ||||||||
Increase/(decrease)
in Retail Stores segment sales
|
(4 | ) |
8
|
3
|
6
|
|||||||||||
Direct-to-Consumer
segment
|
||||||||||||||||
Decrease
in Direct-to-Consumer segment sales
|
(1 | ) | (15 | ) | (7 | ) | — | (5) | ||||||||
Increase/(decrease)
in consolidated total net sales
|
(4 | ) | 5 | (6) |
1
|
12 | (6) | |||||||||
____________________
|
||||||||||||||||
(1)
“Comparable store sales” is not a measure that has been defined under
generally accepted accounting principles. The method of calculating
comparable store sales varies across the retail industry and, therefore,
our calculation of comparable store sales is not necessarily comparable
to
similarly-titled measures reported by other companies. We define
comparable store sales as sales from stores operating in both the
current
and prior-year periods. New stores are added to the comparable store
sales base 13 months after their open date. Sales from stores that
are relocated within the same mall or strip-center, remodeled, or
have a
legal square footage change of less than 20% are included in the
calculation of comparable store sales. Sales from stores that are
relocated outside the existing mall or strip-center, or have a legal
square footage change of 20% or more, are excluded from the calculation
of
comparable store sales until 13 months after the relocated store
is
opened. Stores that are temporarily closed for a period of 4 weeks or
more are excluded from the calculation of comparable store sales
for the
applicable periods in the year of closure and the subsequent
year. Non-store sales, such as catalog and internet sales, are
excluded from the calculation of comparable store
sales.
|
||||||||||||||||
(2)
Includes incremental Retail Stores segment E-commerce
sales.
|
||||||||||||||||
(3)
Includes LANE BRYANT OUTLET stores.
|
||||||||||||||||
(4)
Includes PETITE SOPHISTICATE and PETITE SOPHISTICATE OUTLET
stores.
|
||||||||||||||||
(5)
Comparison is not meaningful, as prior-year period includes sales
from
Crosstown Traders, Inc. from the date of acquisition on June 2, 2005
(approximately 21 weeks).
|
||||||||||||||||
(6)
The increase in consolidated total net sales includes a decrease
of 2% for
the thirteen weeks ended October 28, 2006 and an increase of 7% for
the
thirty-nine weeks ended October 28, 2006 as a result of the
acquisition of Crosstown Traders, Inc. on June 2,
2005.
|
November
3,
|
February
3,
|
|||||||
(Dollars
in millions)
|
2007
|
2007
|
||||||
Cash
and cash equivalents
|
$ |
36.4
|
$ |
143.8
|
||||
Available-for-sale
securities
|
$ |
26.9
|
$ |
2.0
|
||||
Working
capital
|
$ |
465.0
|
$ |
460.6
|
||||
Current
ratio
|
2.2
|
2.2
|
||||||
Long-term
debt to equity ratio
|
35.3 | % | 19.1 | % |
(Dollars
in millions)
|
Series
1999-2
|
Series
2002-1
|
Series
2004
|
Series
2004-1
|
2005-RPA(1)
|
Series
2007-1
|
|||||||||||
Date
of facility
|
May
1999
|
November
2002
|
January
2004
|
August
2004
|
May
2005
|
October
2007
|
|||||||||||
Type
of facility
|
Conduit
|
Term
|
Conduit
|
Term
|
Conduit
|
Term
|
|||||||||||
Maximum
funding
|
$50.0
|
$100.0
|
$50.0
|
$180.0
|
$55.0
|
$320.0
|
|||||||||||
Funding
as of
|
|||||||||||||||||
November
3, 2007
|
$33.2
|
$68.2
|
$0.0
|
$180.0
|
$41.5
|
$320.0
|
|||||||||||
First
scheduled
|
|||||||||||||||||
principal
payment
|
Not
applicable
|
August
2007
|
Not
applicable
|
April
2009
|
Not
applicable
|
April
2012
|
|||||||||||
Expected
final
|
|||||||||||||||||
principal
payment
|
Not
applicable(2)
|
May
2008
|
Not
applicable(2)
|
March
2010
|
Not
applicable(2)
|
March
2013
|
|||||||||||
Renewal
|
Annual
|
Not
applicable
|
Annual
|
Not
applicable
|
Annual
|
Not
applicable
|
|||||||||||
____________________
|
|||||||||||||||||
(1)
Receivables Purchase Agreement (for the Crosstown Traders catalog
proprietary credit card receivables program).
|
|||||||||||||||||
(2) Series
1999-2 and Series 2004 have scheduled final payment dates that occur
in
the twelfth month following the month in which the series begins
amortizing. These series and 2005-RPA generally begin amortizing 364
days after start of the purchase commitment by the series purchaser
currently in effect.
|
Total
|
Maximum
|
|||||||||||||||
Number
|
Number
of
|
|||||||||||||||
of
Shares
|
Shares
that
|
|||||||||||||||
Purchased
as
|
May
Yet be
|
|||||||||||||||
Total
|
Part
of Publicly
|
Purchased
|
||||||||||||||
Number
|
Average
|
Announced
|
Under
the
|
|||||||||||||
of
Shares
|
Price
Paid
|
Plans
or
|
Plans
or
|
|||||||||||||
Period
|
Purchased
|
per
Share
|
Programs(4)(5)
|
Programs(4)(6)
|
||||||||||||
August
5, 2007 through
|
||||||||||||||||
September
1, 2007
|
4,416,392 | (1) | $ |
9.98
|
4,415,299 | (5) | ||||||||||
September
2, 2007 through
|
||||||||||||||||
October
6, 2007
|
4,262,563 | (2) |
8.69
|
4,261,243 | (5) | |||||||||||
October
7, 2007 through
|
||||||||||||||||
November
3, 2007
|
1,300,200 | (3) |
7.50
|
1,300,000 | (4)(5) | |||||||||||
Total
|
9,979,155
|
$ |
9.11
|
9,976,542 | (5) | 3,752,693 | (4)(6) | |||||||||
____________________
|
||||||||||||||||
(1)
Includes 1,093 shares ($8.57 average price paid per share) withheld
for
the payment of payroll taxes on employee stock awards that vested
during
the period and 4,415,299 shares ($9.98 average price paid per share)
purchased in the open market (see Note (5) below).
|
||||||||||||||||
(2)
Includes 1,320 shares ($8.90 average price paid per share) withheld
for
the payment of payroll taxes on employee stock awards that vested
during
the period and 4,261,243 shares ($8.69 average price paid per share)
purchased in the open market (see Note (5) below).
|
||||||||||||||||
(3)
Includes 200 shares ($8.15 average price paid per share) withheld
for the
payment of payroll taxes on employee stock awards that vested during
the
period and 1,300,000 shares ($7.50 average price paid per share)
purchased
in the open market (see Notes (4) and (5) below).
|
||||||||||||||||
(4) In
Fiscal 1998, we publicly announced that our Board of Directors granted
authority to repurchase up to 10,000,000 shares of our common
stock. In Fiscal 2000, we publicly announced that our Board of
Directors granted authority to repurchase up to an additional 10,000,000
shares of our common stock. In Fiscal 2003, the Board of Directors
granted an additional authorization to repurchase 6,350,662 shares
of
common stock issued to Limited Brands in connection with our acquisition
of LANE BRYANT. From Fiscal 1998 through Fiscal 2003, pursuant to
these authorizations, we repurchased a total of 21,370,993 shares
of
common stock, which included shares purchased on the open market
as well
as shares repurchased from Limited Brands. During the period from
October 7, 2007 through November 3, 2007, we repurchased a total
of
1,226,976 shares of common stock under these programs. As of November
3, 2007, 3,752,693 shares of our common stock remain available for
repurchase under these programs. Subsequent to the period covered by
this Report, we repurchased a total of 500,000 shares of our common
stock
under these programs. The repurchase programs have no expiration
date.
|
||||||||||||||||
(5) In
May 2007, we announced a program to use $80 to $100 million of the
proceeds from our issuance of 1.125% Senior Convertible Notes due
May 1,
2014 to repurchase shares of common stock through the remainder of
our
fiscal year ending February 2, 2008. During the quarter ended August
4, 2007, we repurchased 1,666,679 shares of common stock in the open
market under this program. During the quarter ended November 3, 2007,
we repurchased 4,790,728 shares of common stock in the open market
and 3,958,838 shares of common stock under an agreement with a
third-party financial institution that provided the third party with
discretionary authority to purchase shares of our common stock on
our
behalf. As of November 3, 2007, we have completed our planned
repurchases of common stock under this program.
|
||||||||||||||||
(6) On
November 8, 2007 (subsequent to the period covered by this Report),
we
publicly announced that our Board of Directors granted authority
to
repurchase shares of our common stock up to an aggregate value of
$200
million. Shares may be purchased in the open market or through
privately-negotiated transactions, as market conditions allow. This
repurchase program has no expiration date.
|
2.1
|
Stock
Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition
Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown
Traders, Inc. whose names are set forth on the signature pages thereto,
and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,
incorporated by reference to Form 8-K of the Registrant dated June
2,
2005, filed on June 8, 2005 (Exhibit 2.1).
|
3.1
|
Restated
Articles of Incorporation, incorporated by reference to Form 10-K
of the
Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,
Exhibit 3.1).
|
3.2
|
Amended
Article 5, Subsection (d) to the Articles of Incorporation of Charming
Shoppes, Inc., incorporated by reference to Form 8-K of the Registrant
dated September 25, 2007, filed on September 26, 2007 (Exhibit
3.1).
|
3.3
|
Bylaws,
as Amended and Restated, incorporated by reference to Form 10-Q of
the
Registrant for the quarter ended July 31, 1999 (File No. 000-07258,
Exhibit 3.2).
|
4.1
|
Indenture
between the Company and Wells Fargo Bank, National Association, dated
as
of April 30, 2007, incorporated by reference to Form 8-K of the Registrant
dated April 30, 2007, filed on May 3, 2007 (Exhibit 4.1).
|
4.2
|
Form
of 1.125% Senior Convertible Note due 2012 (included in Exhibit
4.1).
|
10.1
|
Registration
Rights Agreement among the Company and Banc of America Securities
LLC and
J.P. Morgan Securities Inc., dated as of April 30, 2007, incorporated
by
reference to Form 8-K of the Registrant dated April 30, 2007, filed
on May
3, 2007 (Exhibit 10.1).
|
10.2
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and Bank of America, N.A., dated April 24, 2007, incorporated
by
reference to Form 8-K of the Registrant dated April 25, 2007, filed
on May
1, 2007 (Exhibit 10.1).
|
10.3
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and JPMorgan Chase Bank, National Association, dated April
24,
2007, incorporated by reference to Form 8-K of the Registrant dated
April
25, 2007, filed on May 1, 2007 (Exhibit 10.2).
|
10.4
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and Wachovia Bank, National Association, dated April 24,
2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007 (Exhibit 10.3).
|
10.5
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and Bank of America, N.A., dated April 24, 2007, incorporated by
reference
to Form 8-K of the Registrant dated April 25, 2007, filed on May
1, 2007
(Exhibit 10.4).
|
10.6
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and JPMorgan Chase Bank, National Association, dated April 24, 2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007 (Exhibit 10.5).
|
10.7
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and Wachovia Bank, National Association, dated April 24, 2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007 (Exhibit 10.6).
|
10.8
|
Charming
Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan, amended
and
restated effective June 21, 2007, incorporated by reference to Form
10-Q
of the Registrant for the quarter ended August 4, 2007 (File No.
000-07258, Exhibit 10.8).
|
10.9
|
Amendment
dated as of October 17, 2007 to Second Amended and Restated Pooling
and
Servicing Agreement dated as of November 25, 1997 and heretofore
amended
among Charming Shoppes Receivables Corp. (“CSRC”), Spirit of America, Inc.
(“SOAI”), and U.S. Bank National Association, as Trustee (“Trustee”),
incorporated by reference to Form 8-K of the Registrant dated October
17,
2007, filed on October 22, 2007 (Exhibit 10.1).
|
10.10
|
Series
2007-1 Supplement dated as of October 17, 2007 to the Second Amended
and
Restated Pooling and Servicing Agreement dated as of November 25,
1997 and
heretofore amended among CSRC, SOAI and Trustee, incorporated by
reference
to Form 8-K of the Registrant dated October 17, 2007, filed on October 22,
2007 (Exhibit 10.2).
|
10.11
|
Class
A, Class M, and Class B Certificate Purchase Agreement dated as of
October
10, 2007 among CSRC, SOAI, Barclays Capital, Inc. and Fashion Service
Corp, incorporated by reference to Form 8-K of the Registrant dated
October 17, 2007, filed on October 22, 2007 (Exhibit 10.3).
|
10.12
|
Class
C Purchase Agreement dated as of October 17, 2007 among CSRC, SOAI,
Trustee, Galleon Capital, LLC, and Clipper Receivables Company, LLC,
incorporated by reference to Form 8-K of the Registrant dated October
17,
2007, filed on October 22, 2007 (Exhibit 10.4).
|
10.13
|
Purchase
Agreement dated as of October 31, 2007 between World Financial Network
National Bank, Spirit of America National Bank, Lane Bryant, Inc.,
Sierra
Nevada Factoring, Inc., and Charming Shoppes Outlet Stores, LLC,
incorporated by reference to Form 8-K of the Registrant dated October
31,
2007, filed on November 5, 2007 (Exhibit 99.1).
|
|
|
|
|
|
CHARMING
SHOPPES, INC.
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
December 7, 2007
|
/S/
DORRIT J. BERN
|
|
Dorrit
J. Bern
|
|
Chairman
of the Board
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
|
Date:
December 7, 2007
|
/S/
ERIC M. SPECTER
|
|
Eric
M. Specter
|
|
Executive
Vice President
|
|
Chief
Financial Officer
|
Exhibit
No.
|
Item
|
2.1
|
Stock
Purchase Agreement dated May 19, 2005 by and among Chestnut Acquisition
Sub, Inc., Crosstown Traders, Inc., the Securityholders of Crosstown
Traders, Inc. whose names are set forth on the signature pages thereto,
and J.P. Morgan Partners (BHCA), L.P., as the Sellers’ Representative,
incorporated by reference to Form 8-K of the Registrant dated June
2,
2005, filed on June 8, 2005. (Exhibit 2.1).
|
3.1
|
Restated
Articles of Incorporation, incorporated by reference to Form 10-K
of the
Registrant for the fiscal year ended January 29, 1994 (File No. 000-07258,
Exhibit 3.1).
|
3.2
|
Amended
Article 5, Subsection (d) to the Articles of Incorporation of Charming
Shoppes, Inc., incorporated by reference to Form 8-K of the Registrant
dated September 25, 2007, filed on September 26, 2007 (Exhibit
3.1).
|
3.3
|
Bylaws,
as Amended and Restated, incorporated by reference to Form 10-Q of
the
Registrant for the quarter ended July 31, 1999 (File No. 000-07258,
Exhibit 3.2).
|
4.1
|
Indenture
between the Company and Wells Fargo Bank, National Association, dated
as
of April 30, 2007, incorporated by reference to Form 8-K of the Registrant
dated April 30, 2007, filed on May 3, 2007. (Exhibit
4.1).
|
4.2
|
Form
of 1.125% Senior Convertible Note due 2012 (included in Exhibit
4.1).
|
10.1
|
Registration
Rights Agreement among the Company and Banc of America Securities
LLC and
J.P. Morgan Securities Inc., dated as of April 30, 2007, incorporated
by
reference to Form 8-K of the Registrant dated April 30, 2007, filed
on May
3, 2007. (Exhibit 10.1).
|
10.2
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and Bank of America, N.A., dated April 24, 2007, incorporated
by
reference to Form 8-K of the Registrant dated April 25, 2007, filed
on May
1, 2007. (Exhibit 10.1).
|
10.3
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and JPMorgan Chase Bank, National Association, dated April
24,
2007, incorporated by reference to Form 8-K of the Registrant dated
April
25, 2007, filed on May 1, 2007. (Exhibit 10.2).
|
10.4
|
Convertible
Bond Hedge Transaction Confirmation entered into by and between the
Company and Wachovia Bank, National Association, dated April 24,
2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007. (Exhibit 10.3).
|
10.5
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and Bank of America, N.A., dated April 24, 2007, incorporated by
reference
to Form 8-K of the Registrant dated April 25, 2007, filed on May
1,
2007. (Exhibit 10.4).
|
10.6
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and JPMorgan Chase Bank, National Association, dated April 24, 2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007. (Exhibit 10.5).
|
Exhibit
No.
|
Item
|
10.7
|
Issuer
Warrant Transaction Confirmation entered into by and between the
Company
and Wachovia Bank, National Association, dated April 24, 2007,
incorporated by reference to Form 8-K of the Registrant dated April
25,
2007, filed on May 1, 2007. (Exhibit 10.6).
|
10.8
|
Charming
Shoppes, Inc. 2003 Non-Employee Directors Compensation Plan, amended
and
restated effective June 21, 2007, incorporated by reference to Form
10-Q
of the Registrant for the quarter ended August 4, 2007 (File No.
000-07258, Exhibit 10.8).
|
10.9
|
Amendment
dated as of October 17, 2007 to Second Amended and Restated Pooling
and
Servicing Agreement dated as of November 25, 1997 and heretofore
amended
among Charming Shoppes Receivables Corp. (“CSRC”), Spirit of America, Inc.
(“SOAI”), and U.S. Bank National Association, as Trustee (“Trustee”),
incorporated by reference to Form 8-K of the Registrant dated October
17,
2007, filed on October 22, 2007 (Exhibit 10.1).
|
10.10
|
Series
2007-1 Supplement dated as of October 17, 2007 to the Second Amended
and
Restated Pooling and Servicing Agreement dated as of November 25,
1997 and
heretofore amended among CSRC, SOAI and Trustee, incorporated by
reference
to Form 8-K of the Registrant dated October 17, 2007, filed on October
22,
2007 (Exhibit 10.2).
|
10.11
|
Class
A, Class M, and Class B Certificate Purchase Agreement dated as of
October
10, 2007 among CSRC, SOAI, Barclays Capital, Inc. and Fashion Service
Corp, incorporated by reference to Form 8-K of the Registrant dated
October 17, 2007, filed on October 22, 2007 (Exhibit 10.3).
|
10.12
|
Class
C Purchase Agreement dated as of October 17, 2007 among CSRC, SOAI,
Trustee, Galleon Capital, LLC, and Clipper Receivables Company, LLC,
incorporated by reference to Form 8-K of the Registrant dated October
17,
2007, filed on October 22, 2007 (Exhibit 10.4).
|
10.13
|
Purchase
Agreement dated as of October 31, 2007 between World Financial Network
National Bank, Spirit of America National Bank, Lane Bryant, Inc.,
Sierra
Nevada Factoring, Inc., and Charming Shoppes Outlet Stores, LLC,
incorporated by reference to Form 8-K of the Registrant dated October
31,
2007, filed on November 5, 2007 (Exhibit 99.1).
|
|
|
|
|