Charming Shoppes plans to sell Fashion Bug

Philadelphia: Charming Shoppes Incorporated shares rose the most in six months after announcing plans to conduct a financial review and sell its Fashion Bug stores as part of a shift to focus on growing sales at its Lane Bryant stores.

Charming Shoppes hired Barclays Capital as a financial adviser, according to a statement.

The Pennsylvania-based retailer didn't give a time frame for the divestiture of Fashion Bug or completion of the review.

The chief executive officer Tony Romano will expand the plus-size Lane Bryant brand to 900 stores and outlet locations, according to the statement.

Plans to open 125 new stores and relocate 125 others will improve the company's earnings before interest, depreciation and amortisation margin into the "high teens," Romano said.

Consecutive losses

The company has posted losses in the previous four years as department stores and other retailers added large-size clothing.

In the quarter ended October 29, it had 821 Lane Byrant and Lane Bryant Outlet stores and 664 Fashion Bug and Fashion Bug Plus locations, according to the statement.

Charming Shoppes began more than 70 years ago when the Sidewater brothers opened a single apparel store in Philadelphia.

The purchase of the Lane Bryant chain a decade ago turned Charming Shoppes into the largest plus-size retailer in the United States, according to the company's website.