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Shopping Centers Today -> November 2002
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NOTHING FANCY
Christopher & Banks sells no-nonsense clothes for working women
By Kimberly Pfaff
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| C.J. Banks, an off-shoot store catering to plus-size women, will open about 30 more units next year. |
Can a women’s specialty apparel concept succeed, even when fashion is not exactly its strongest suit? Consider Plymouth, Minn.-based Christopher & Banks. Formerly known as Braun’s, the chain offers moderately priced, private-label looks for women 35 and up. And though the company may not be copying the latest runway styles, it has been doing big business.
At a time when most specialty retailers are in a slump, Christopher & Banks has enjoyed 17 consecutive quarters of earnings growth. Sales for 2001 were $275.9 million, up 32 percent over 2000 sales. Second-quarter 2002 comparable-store sales were up 6 percent from the year-ago quarter, while the quarter’s total sales rose 28 percent to $73.9 million, from $57.8 million last year.
Accordingly, Christopher & Banks ranked 14th this year on Fortune magazine’s annual list of the 100 fastest-growing companies. And the 408-store company, with a presence in 31 U.S. states, is about to extend its reach.
Company officials declined to be interviewed for this article, but the retailer is on track to open 90 stores for the 2002 fiscal year, which ends in March; this year it has already opened 25 Christopher & Banks stores and 20 units of its plus-size offshoot, C.J. Banks. For next year the company is targeting about 70 new Christopher & Banks stores and 30 C.J. Banks.
The company’s private-label clothing focuses on three main categories: sportswear, sweaters and dresses. Though none of its mainstream offerings would be confused with high fashion, retail observers say the looks are right on target for the company’s core customers: working women age 35 to 55 with families.
“They’ve recognized an underserved niche in the marketplace: specialty stores that strongly appeal to the baby-boom customer,” said Lois Huff, vice president of soft goods at Retail Forward, a Columbus, Ohio-based market research firm. “You have Talbots, Chico’s, J. Jill, Coldwater Creek and then department stores. There [are] not that many people going after the baby-boom customer, and a lot of women don’t necessarily want to dress like a 20-year-old.”
Consequently, Christopher & Banks is a “pretty potent formula” offering a style for a massive audience that is currently underserved, she added.
The store has struck its own note in the world of retail, agreed Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm based in New York City.
“What’s the No. 1 problem in retail? Too much sameness,” Davidowitz said. “Well, one thing there’s not too much of is what Christopher & Banks does. In fact, there’s none of it. It’s not fancy, but it’s Middle America, and there are lots of customers who don’t want to be hip like Limited Express.”
The credit for the company’s success goes to William J. Prange, Christopher & Banks’ chairman and CEO, said Davidowitz.
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“William Prange is a genius at product development, and he’s created a specific look,” Davidowitz said. “He claims he’s dressing ‘Mary,’ and Mary is a bank teller, an assistant at a law firm, a secretary — she’s all of those things, and she doesn’t have unlimited funds. She has to look right, but when you’re all of those things that he’s defined, you can’t be way out on the fashion curve — that’s inappropriate. Prange says this is what he thinks about all day: Who is she, how does she live, what does she need? He’s focused on Mary, and that’s a great way to run a business.”
The company’s offerings may not be upscale, but the retailer has certainly dressed up its customer service. Garments are hung on wooden hangers, purchases are wrapped in tissue and placed in a drawstring paper bag, and receipts are placed in envelopes, a practice followed by higher-end retail concepts.
The company opened its first store as Braun’s in 1956 in Minneapolis. Following a bankruptcy reorganization in 1996, the firm rebranded itself to the more upscale-sounding Christopher & Banks in 1999. A year later the retailer launched its plus-size concept, C.J. Banks, following the same formula of offering mainstream fashions at value-conscious prices. There are now 88 C.J. Banks stores. About 95 percent of both store names are located in malls, while 5 percent are in lifestyle centers.
“Size 14 and up is the fastest-growing retail segment, but there’s still room,” said Davidowitz. “Bill Prange is doing something different. And frankly, I’m not sure that the plus-size customer wants to look that hip. Yes, there’s Torrid, and for young women, that’s appropriate. But for the C.J. Banks customer, I’m not sure she wants to look that way. I think their concept is perfect.”
Developers seem to feel the same way about the company.
“They’ve been the small-cap darling on Wall Street for the past four years,” said T.J. Drought Jr., CLS, senior vice president of leasing at Columbus, Ohio-based Glimcher Realty Trust, which operates mid-size centers and currently has 20 Christopher & Banks and C.J. Banks stores. “They’ve had an unbelievable run. As far as retail sales in their category, they perform very favorably in most of the markets we’re in. They’ve got the right looks and prices for that value-conscious shopper, they’ve got the right footprints, and they’re in the right locations for their merchandise.”
The company has also benefited from having some competitors leave the industry, such as Paul Harris and other regional players, Drought said. “We absolutely plan to be part of their expansion,” he said. “They’re doing a lot of business out West now and in the Southeast, and we look forward to doing more business with them.”
Developers of larger centers are also eager to make room for Christopher & Banks.
“They fill a void for that customer in the shopping center,” said David T. Weinert, group vice president of leasing at Taubman Centers, adding that his company recently began working with Christopher & Banks. “They’re very moderate, they cater to a mature audience, and I think there’s very much a place for that in our centers.”
As the retailer expands, however, one issue is whether its Midwestern styling will play equally well in other parts of the country. Weinert says it could.
“By and large, their customer exists in part in all the major markets in the country,” he said. “One could say that Los Angeles is too contemporary a market, but then a conservative retailer like Talbots goes there and does well.”
Some industry analysts are more cautious, though.
“No retailer is going to be equally well received in all areas,” noted Retail Forward’s Huff. “And that’s OK, as long as you understand that, and move accordingly. So as long as Christopher & Banks is able to understand who their customer is and what appeals to them, and doesn’t overextend itself geographically where it doesn’t make sense, they’ll be fine.”
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