Focusing on its core consumer’s fashion sensibilities has enabled Christopher & Banks Corporation to significantly increase sales and gross margins. The next step: growing its flagship store and new plus-size C.J. Banks chain to reach 900 stores in the next five years.

In the specialty apparel world, consider the Christopher & Banks Corporation (NASDAQ: CHBS) as akin to the mouse that roared. The Minneapolis-based chain of 274 stores has managed to outperform many of its specialty apparel compadres by posting double-digit comps for the past two years and increasing gross margins from 35% to 44%.

The company’s winning formula: know your customers, give them the goods they want, lower your costs, and keep steady sellers in stock.

This year the company plans to continue the momentum by rolling out 40 Christopher & Banks stores and 40 of its new C.J. Banks stores geared to the underserved plus-size market, thus increasing the number of stores to 450 of each concept in five years.

The former Braun’s Fashions Corporation has come a long way since it filed Chapter 11 in 1996. New management put what Bill Prange, chairman and CEO, refers to as a "laser focus" on a consumer niche overlooked by competitors: middle-income women aged 35-55, living in the Northern U.S., who want casual garments that can take them from work to soccer games. They don't go for trendy styles but prefer a look that's Midwestern and maybe even a little cute. And they want the customer service and upscale touches of a Talbots at about half the price.

Management then retooled the merchandise mix from business attire to sweaters, dresses and sportswear offered under the "Christopher & Banks" private label, 70% of which the company sources directly from key vendors overseas.

A product testing system is used to determine consumer demand, and information systems with enhanced planning, tracking and analysis capabilities enable the retailer to identify and replenish hot items quickly to increase sell-through at regular prices.

The company then identified a similar niche in the plus-size market. According to the NPD Group, half of American women wear a size 14 or up, and plus is the fastest growing segment in the women’s apparel industry. Yet plus sizes often go begging in department stores struggling with space allocations.

Tammy Leomazzi Boyd, a former divisional merchandise manager for special sizes at Sears, is president of C.J. Banks. The first 20 C.J. Banks stores opened last year in malls that already support a Christopher & Banks and are performing up to expectation.

Christopher & Banks knows you can't take a one-size-fits-all approach to baby-boomer and plus-size women. The chain isn't looking to offer its appliqued sweaters to sophisticated urbanites. Instead, the retailer is filling in existing markets and cherry picking sites in adjoining, climatically similar states that match its demographic profile.

The company plans to continue evaluating new concepts, so don't rule out a future petites or kids division, or perhaps a catalog or e-commerce-enabled Web site for consumers in Northern climes and plus-size women who more frequently shop from home.

With a successful strategy firmly in place, growth plans on target, and a value-oriented appeal that makes it unlikely to be hit hard during an economic downturn, Christopher & Banks is nothing less than one of the few safe havens that will weather what is bound to be a stormy year in retail. Add the fact that the stock currently isn’t valued as highly as such competitors as Chico’s FAS (NASDAQ: CHCS) and Talbots (NYSE: TLB), and you’ve got a sure bet—if you move fast.

Retail Intelligence Group, 2001

Copyright© all text 2004 by Ela Schwartz