Charlotte Russe Announces Expansion

Charlotte Russe Holdings Inc. trimmed its size when it sold its Rampage division in 2006, but on July 25, the San Diego–based retailer announced it was going on another growth spurt.

During a conference call for its third-quarter earnings, Charlotte Russe executive Mark Hoffman announced that his company has set a goal for 2008 to open 60 new stores and remodel 20 stores.

However, the retailer’s third-quarter comparable sales came in below estimates. Hoffman said he hopes that Back-to-School shopping will improve Charlotte Russe’s fortunes.

“We are pleased that we achieved our eighth consecutive quarter of positive comparable sales growth,” Hoffman said. “But sales were below plan in June.”

Hoffman blamed the slow sales on decreasing mall traffic. Jeffrey Van Sinderen, an equity analyst for Los Angeles–based B. Riley & Associates, agreed with Hoffman’s assessment, but he had faith in the Charlotte Russe management team.

“They have a history of running business well in a difficult environment,” he said. Charlotte Russe reported a same-store sales increase of 13 percent in the third quarter.

Hoffman forecast that his company would report flat same-store sales for the fourth quarter.—Andrew Asch