Charming Shoppes

Charming Shoppes yesterday reported record third-quarter earnings of $9.91 million. "We haven't had a down quarter but once since we went public in 1971," said treasurer Bernard Brodsky. The Bensalem-based apparel chain attributed the 31 percent increase in sales in part to the recent openings of 135 new stores, a record expansion for the company. But sales in existing stores also experienced an increase of 10 percent over last year's third quarter. The quarterly earnings would have been higher if not for retroactive tax- code changes, which disallow $1.07 million in investment tax credits that Charming Shoppes hoped to use this year.

Charming Shoppes Inc., the Bensalem women's apparel chain, yesterday reported sharply higher profits for the third quarter and first nine months of its 1992 fiscal year. Bernard Brodsky, vice president and treasurer of the company, said both old and new stores contributed to the profit performance. Charming Shoppes operates the Fashion Bug and Fashion Bug Plus stores. "The older stores . . . were able to sustain higher gross profits, higher sales per store and there were well-controlled expense levels," Brodsky said.

After a strong start to its fiscal year, Charming Shoppes Inc. lost momentum in the third quarter. The Bensalem-based retailer said profits had fallen 18 percent in the quarter ended Oct. 28. The company blamed unusually mild autumn weather and poor demand for sweaters. "We expected to do a lot better," said Bernard Brodsky, Charming Shoppes' treasurer. "Our sales were below plan, and our markdowns were above plan. " Although Charming Shoppes' sales were 10 percent higher than in the same quarter last year, most of the gains came from the opening of new stores.

Charming Shoppes, the Bensalem retailer that operates the Fashion Bug women's apparel chain, yesterday said its lenders had rejected a plan to restructure $150 million in debt. The company also said it had approvals for a $30 million short-term loan, but that the banks that have supplied the long-term line of credit are balking at approving that, too. Bernard Brodsky, Charming Shoppes' treasurer, said the company was continuing to negotiate with its lenders. Brodsky would not discuss the terms of the proposed loan packages or name the lenders involved.

Beleaguered plus-size clothing retailer Charming Shoppes Inc. said yesterday it filed a federal lawsuit against several activist shareholders, likening them to "corporate raiders" trying to destabilize the company. The investors whose efforts to shake up operations at Charming Shoppes provoked the lawsuit responded by saying the suit was "baseless" and an attempt "to usurp corporate democracy and disenfranchise shareholders. " The lawsuit marks an increasingly hostile phase in a fight for control of the Bensalem company that runs Lane Bryant, Fashion Bug and other stores.

Charming Shoppes Inc. was stuck last Christmas season with a lot of inventory that was moved out of the stores only with the help of massive markdowns, so the Bensalem women's apparel chain bought modestly this year. As a consequence, sales on a same-store basis were down by 4 percent. The sales increase that came from store openings was not enough to cover higher operating costs. The result was a drop in earnings for the third quarter. But the policy is expected to pay off in the fourth quarter with fewer markdowns, higher profit margins and a fatter bottom line, said vice president and treasurer Bernard Brodsky.

Charming Shoppes Inc., of Bensalem, has launched a major strike in its campaign to protect its chief executive officer and two others from being booted next month from its board of directors. The struggling retailer of plus-size women's apparel began mailing out definitive proxy materials Wednesday, which included a strongly worded letter urging shareholders to reelect Dorrit J. Bern and two other incumbents at its May 8 shareholder meeting. The company that runs the Lane Bryant and Fashion Bug chains said Bern, the longtime CEO who also is chairwoman of the board, should continue leading its financial recovery.