Charlotte Russe Stocks Slide After Revised Forecast

Stocks tumbled more than 20 percent on Sept. 9 for San Diego–based young women’s clothier Charlotte Russe Holdings, Inc. after Chief Executive Mark Hoffman reported revised guidance for the company’s fourth quarter for fiscal 2004.

Hoffman told his investors to expect comparable- store sales to decline to low single digits for Charlotte Russe’s fourth quarter, which ends Sept. 25, compared to previous guidance of positive mid-single-digit same-store sales.

The chief executive blamed poor performance on the weak Back-to-School season and an unsuccessful rebranding effort for the company’s juniors store Rampage.

Hoffman forecast that his company would be able to reposition Rampage by the holidays, which would end the year on a positive note and pave the way for a strong 2005. However, analysts such as Liz Pierce of Sanders Morris Harris Group Inc. in Los Angeles wondered if the holidays would give the company any cheer.

“Charlotte Russe has short lead times. It allows them to theoretically reposition quickly,” Pierce said. “If they’re still struggling to find the right brand positioning now, their holiday season might be disappointing.”

Andrew Asch