Charming Shoppes Reels In A Big Catalog Business: The Crosstown Traders acquisition is a major step in the apparel retailer’s plan to ultimately launch its own catalog

Most experts would agree that multi-channel retailing – marketing via stores, catalogs, and the Internet simultaneously – is virtually a must-have capability for retailers in today’s shopping environment, where consumers like to have multiple options for buying merchandise. The ability to sell through diverse channels has been shown to enhance “brand experiences” and boost customer loyalty, they note. With that in mind, Charming Shoppes Inc., a retail chain that specializes in plus-size women’s clothing, recently agreed to buy direct-marketer Crosstown Traders Inc. from JPMorgan Partners for $218 million, making it the leading multi-channel specialty retailer of plus-size women’s apparel in the United States, according to Lee Helman, Senior Vice President at Gruppo, Levey & Co., which advised Crosstown Traders. Charming Shoppes operates Lane Bryant, Fashion Bug, Fashion Bug Plus, and Catherines Plus Sizes stores throughout the United States. Crosstown is the parent company of catalog retailers Figi’s, which markets specialty food and gift products, and Arizona Mail Order, which sells women’s apparel and accessories through a number of catalogs, including Old Pueblo Traders, Bedford Fair Lifestyles, Lew Magram, Brownstone Studio, and Monterey Bay Clothing Co. Almost all of Arizona Mail Order’s apparel titles carry plus sizes. Tucson, Ariz.-based Crosstown Traders was created when JPMorgan bought the Arizona Mail Order and Figi’s operations from Federated Department Stores several years ago. Charming Shoppes did not return calls for comment on the deal so it could not be ascertained whether it has definite plans to grow the specialty gifts part of the business, perhaps through cross-marketing to its apparel customer base, or whether that asset just comes as part of the package, and may be divested at a later time. Helman, however, asserts, “I’m sure they’re going to try to grow the specialty gifts area.” Commenting on the deal, Stuart Kessler, President and a Partner of Clear Thinking Group, a retail and consumer products consultancy based in Hillsborough, N.J., says, “The specialty gifts area could be a nice ancillary business that comes with little additional capital expense or HR expense. With these types of businesses, you are always looking to accessorize. Accessories are a very profitable business, and in some convoluted way, you can look at the specialty gifts business as an accessory,” he notes. “However, Charming Shoppes may end up disposing of it later on. In either case, I think there is very little downside. If they can grow it, great; if it doesn’t fit, they can always sell it.” Dorrit Bern, Charming Shoppes’ Chairman, President, and CEO, commented in a printed statement that the deal “is a key step in our preparation for the launch of our own catalog.” Currently, New York-based direct-mailer Redcats USA, formerly Brylane, has a license agreement for use of the Lane Bryant trademark until October 2007, at which time the retailer plans to launch its own Lane Bryant catalog. Experts note that the catalog channel is particularly important to plus-size shoppers, who often like to have privacy in shopping for apparel. “Today a retailer has to offer shopping options. Any retailer that isn’t looking at catalog and Internet-based businesses is naive. I believe in the overriding theory that we’re dealing with ever-increasing time-starved consumers, and anything you can do to enhance the shopping experience under your brand is a positive,” notes Kessler. (c) 2005 Mergers and Acquisitions Journal and SourceMedia, Inc. All Rights Reserved. http://www.majournal.com http://www.sourcemedia.com