Christopher & Banks Corp · OTC:CBKCQ
Christopher & Banks — Investor Presentation (October 2014)
38 slides from Christopher & Banks's investor presentation, Oct 7, 2014
Slide 1: Charting Our Path to Growth and Long-Term Profitability
Charting Our Path to Growth and Long-Term Profitability October 2014
Slide 2: Safe Harbor
Certain statements on the slides which follow may be forward-looking statements about Christopher & Banks Corporation (the “Company”). Such forward-looking statements involve risks and uncertainties which may cause actual results to differ. These forward-looking statements may be identified by such
Slide 3: Our Vision & Mission
Our Vision & Mission Vision To be her trusted brand by delivering style and value every day Mission To provide women of all sizes with apparel and accessories with style and versatility that reflects who she is, lasting quality and the affordable value she expects, delivered with the personalized at
Slide 4: A Heritage Brand
A Heritage Brand 1956 Braun’s opens its first store 1992 Braun’s goes public 2000 Company changes name of stores to Christopher & Banks First CJ Banks store opens - focused on plus sizes Separate Ecommerce sites launched 2008 2009 First combined store format opens under dual brand First Outlet Store
Slide 5: Store Count
Store Count * FY12R represents 48 weeks ended 1/28/12 ** FY14 amounts are projected as of September 2014 Acorn Division store count from FY05-FY08 was 20, 24, 36 & 37 respectively (not reflected above – Acorn store concept was discontinued in 2008) 346 413 467 503 524 543 548 540 517 402 383 333 247
Slide 6: Christopher & Banks and C.J. Banks stores
Christopher & Banks 2000 | Braun’s changes names to Christopher & Banks 2009 | Peak store count at 548 stores 9/3/14 | 247 stores Projected (end of fiscal year) | 194 stores C.J. Banks 2000 | First CJ Banks store opens – catering to plus size 2009 | Peak store count at 267 stores 9/3/14 | 117 stores
Slide 7: Outlet Stores
2010 | Opened 1st stores - Kansas Legends and Albertville, MN 9/3/14 | 42 stores Projected (end of fiscal year) | 44 stores Future Potential | 75 -100 stores Outlet Stores 7
Slide 8: MPW Stores
2009 | Dual Brand store opened in Moosic, PA 2013-2014 | Tested current MPW format 9/3/14 | 141 stores Projected (end of fiscal year) | 197 stores Future Potential | 100% of store base MPW Stores 8
Slide 9: Our Core Customer
Target women 45-60 years Avg. household income $70k-$75k More than 50% higher than US avg. 70% work outside of the home Two-thirds married Purchases 3.4 times annually Self-reports that she visits more frequently Spends $157 annually On average, $46 per purchase 9 Our Core Customer
Slide 10: Experienced Management Team
Name Title Year Joined CBK Years in Industry LuAnn Via President and CEO 2012 30+ Peter Michielutti EVP, COO and CFO 2012 20+ Michelle Rice SVP, Store Operations 2008 20+ Monica Dahl SVP, Marketing 2004 20+ Lynn Derry SVP, General Merchandise Manager 2014 30+ Tricia Perket VP, Divisional Merchandise
Slide 11: Improved Financial Performance
11 Improved Financial Performance Instituted merchandising and marketing strategies focused on sales and profitability over the last two years Comparable store sales in both 4Q13 and 1Q14 were negatively impacted by severe weather Improved inventory flow and instituted a more disciplined markd
Slide 12: Corporate Strategic Initiatives
Migration to MPW (Missy, Petite, Women) Format Focused Assortments and Merchandising Compelling Price/Value Equation Targeted Messaging and Marketing Engaged and Easy to Shop Store Experience Operational Excellence 12 Corporate Strategic Initiatives
Slide 13: Long-Range Financial Targets
Over the Next 3 Fiscal Years, Expect to Deliver Mid-Single- Digit Comp Growth 300-400 bps of Gross Margin Expansion SG&A Leverage 2% - 3% Annual Net Square Footage Growth High-Single-Digit Operating Margin by End of Fiscal 2016 13 Long-Range Financial Targets
Slide 14: Focused Merchandise Assortments
14 Consistently deliver a balanced, compelling and versatile fashion assortment Offer fashion-right, age-appropriate options Continue to maximize sales and margin with year round core basic programs and appropriate depth of key styles Increase wear-to-work options including jackets, blouses,
Slide 15: Focused Merchandise Assortments
Expand core programs of Everyday Denim and Layer Your Look knit tees Introduce new fit solutions and easy care fabrics Signature slimming pants Wrinkle-resistant shirts Expand weekend wear Expand soft knit dressing 15 Focused Merchandise Assortments
Slide 16: Compelling Price/Value Equation
16 Offer a price/value proposition that resonates with customers Provide attractive opening price points in all categories Drive key sales and margin at compelling price points Plan promotional buys to maximize margin Continue to offer a well-balanced good / better / best product mix Con
Slide 17: Targeted Messaging and Marketing
17 Leverage Customer Relationship Management (CRM) Programs Friendship Loyalty Program at approximately 4.2 million in total and 2.2 million Active customers generating 97% of our 12-month sales as of end of 2QFY14 Increased analytics around customer segments Investing in qualitative & quant
Slide 18: Targeted Messaging and Marketing
18 Invest in marketing programs that increase customer growth and loyalty while driving measurable returns Continue investment in direct mail Increase investments in social media and select PR Support new store formats with enhanced grand opening events Refine promotional strategy Target
Slide 19: Enhanced Omni-Channel Experience
Enhanced Omni-Channel Experience NOW there is a major shift from Multi-channel to Omni-channel Moving from selling via any channel to providing a seamless, consistent experience across ALL customer touch points – store, web, social, mobile, catalog, email and digital • Adds complexity of integra
Slide 20: Engaged and Easy-to-Shop In-Store Experience
Refreshed “Selling with Care” program Refining selling techniques through additional videos and tools Reinforce clientelling as key to selling culture Increased selling hours at select stores Upgraded Talent Aligning store personnel capabilities with real estate strategy Enhanced on-bo
Slide 21: Destination Walls
Destination Walls christopher& banks | cj banks
Slide 22: Real Estate Strategy
22 In Fiscal 2014 we plan to: Add CJ product to 84 CB stores and add CB product to 2 CJ stores to convert them to the MPW format Close 36 CB/CJ stores and convert them into 18 MPW stores in the existing store location Close 24 CB/CJ stores and relocate to 12 new MPW stores Close 10 CB stores
Slide 23: MPW Types
MPW Types New: Develop a MPW in a new market or an additional store in an existing market Collapse/Combine (CC): Combine CB & CJ into 1 of the 2 existing spaces Collapse/Combine Relocation: Combine existing CB & CJ into a NEW store within the same center Add CJ Relocation: There is an existi
Slide 24: MPW Format Migration
MPW Format Migration 24
Slide 25: MPW Format Migration
MPW Format Migration January May 25 October Nov. – Dec.
Slide 26: Investment Highlights
26 Unique customer niche largely underserved by others Achieve historical sales productivity and gross margin levels generating operating income of 8-10% Drive increases in sales per square foot thru new product introductions, customer acquisition, MPW migration and outlet store growth Contr
Slide 27: Mall of America – 1993
27 Mall of America – 1993
Slide 28: Mall of America – 2014
Mall of America – 2014 28
Slide 29: Mall of America – 2014
29 Mall of America – 2014
Slide 30: Financial Highlights
— christopher& banks: | cj banks 4 MISSY PETITE WOMEN Financial Highlights
Slide 31: Improved Financial Performance
Total comparable sales for 2Q2014 were up 2.6% Improved conversion rates, higher units per transaction, and an increase in the AUR led to a 9.8% increase in average dollar sale Gross margin for fiscal 2Q2014 was 35.3% compared to 33.5% for 2Q2013 Merchandise margin rate improved 143 bps Lo
Slide 32: 3-Year Financial Highlights – Annual Results
52 Weeks Ended 53 Weeks Ended 52 Weeks Ended February 1, 2014** February 2, 2013** January 28, 2012** Net Sales $435.8 $430.3 $436.2 Gross Margin 34.7% 29.4% 23.6% SG&A as % of sales 29.6% 30.0% 32.5% Operating Income (Loss)* $8.9 ($16.0) ($82.1) Net Income (Loss)* $8.7 ($16.1) ($81.4) Adjusted Net
Slide 33: 3-Year Financial Highlights – Quarterly Results
13 Weeks Ended 13 Weeks Ended 13 Weeks Ended August 2, 2014* August 3, 2013* July 28, 2012* Net Sales $106.6 $104.2 $103.4 Gross Margin 35.3% 33.5% 27.7% SG&A as % of sales 29.3% 30.3% 29.6% Operating Income (Loss) $3.3 ($0.0) ($2.2) Net Income (Loss) $3.4 ($0.3) ($2.2) Basic EPS $0.09 ($0.01) ($0.0
Slide 34: EBITDA Performance Since Turnaround Began
EBITDA Performance Since Turnaround Began Embarked on a turnaround in December 2011 and have since made significant changes across various functions This has led to a swift and dramatic improvement in EBITDA performance 34 E B IT D A D o ll a rs (37,231) (39,254) (22,620) (2,531) 11,009 16,330 1
Slide 35: Balance Sheet and Cash Flow Summary
August 2, 2014 (In millions) (unaudited) February 1, 2014 (In millions) Cash and Investments $43.4 $57.2 Merchandise Inventories 48.2 44.9 Property and Equipment, net 41.3 36.5 Total Assets $149.8 $149.0 Long -Term Debt — — Stockholders’ Equity $93.7 $86.9 Balance Sheet and Cash Flow Summary No ou
Slide 36: Q3 Guidance Update
Q3 Guidance Update For the third quarter of fiscal 2014 the Company expects: Total net sales of between $114 and $118 million, compared to $118.1 million in last year’s third quarter. Gross margin improvement of approximately 75 to 100 bps, as compared to the comparable prior year period. SG
Slide 37: FY 2014 Guidance Update
FY 2014 Guidance Update For the full year of fiscal 2014, the Company: Expects capital expenditures to be approximately $22 million to $23 million. Expects to recognize a nominal amount of tax expense, as the Company’s tax provisions will continue to be affected by the valuation allowance on o
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