BENSALEM, Pa., March 20, 1996 - Charming Shoppes, Inc.
(Nasdaq: CHRS), the retail women's apparel chain, today reported its
net loss and sales for the fourth quarter and for the twelve months
ended February 3, 1996.
For the three months ended February 3, 1996, the Company had a
net loss of $107,032,000 or $1.04 per share. This compares to net
income of $5,163,000 or $.05 per share for the corresponding period
last year. Fourth quarter sales were $321,822,000 as against sales
of $345,382,000 during the prior year. The loss includes a
restructuring charge which reduced pre-tax income by $103,000,000.
The charge is related to the closing of underperforming stores as
well as the restructuring of the Company's overseas sourcing and
domestic corporate operations. The after-tax effect on earnings of
the restructuring charge was $70,000,000 or $.68 per share. The
fourth quarter included fourteen weeks as compared to thirteen weeks
during the prior year.
For the twelve months ended February 3, 1996, the Company had a
net loss of $139,241,000 or $1.35 per share. This compares to net
income of $44,689,000 or $.42 per share for the corresponding period
last year. Sales for the twelve months were $1,102,384,000 as
against $1,272,693,000 during the prior year. The current year
included fifty- three weeks as compared to fifty-two weeks during
the prior year.
Consumer response to the Company's merchandising assortment
during the fourth quarter was disappointing. This negative response
combined with a continued weakness in women's apparel sales reduced
customer traffic and caused increased markdowns during the fourth
quarter as compared to the corresponding period during the prior
year. This resulted in decreased sales and decreased gross margins.
During 1995, Charming Shoppes opened 47 stores and closed 174,
ending the year with 1,301 stores in 46 states. The Company ended
the year with 12,238,000 square feet of leased space. Charming
Shoppes operates under the names "Fashion Bug" and "Fashion Bug
CHARMING SHOPPES, INC.
(In thousands, except shares and per-share amounts)
4th Qtr. 4th Qtr.
Fiscal 1996 Fiscal 1995
Percent 14 Weeks Pct. 13 Weeks Pct.
Change of Sales of Sales
Per Share --- ($1.04) --- $0.05 ---
Sales -6.8% $321,822 100.0% $345,382 100.0%
Other Income -32.3% 1,559 0.5% 2,302 0.7%
Total -7.0% 323,381 100.5% 347,684 100.7%
& Occupancy 12.6% 295,775 91.9% 262,666 76.0%
Administrative 9.5% 85,849 26.7% 78,373 22.7%
Interest Expense 273.5% 2,211 0.7% 592 0.2%
Expenses 12.4% 383,835 119.3% 341,631 98.9%
Restructuring Charge NA 103,000 32.0% 0 0.0%
Pretax Profit (Loss) N/C (163,454) -50.8% 6,053 1.8%
Taxes (Benefit) N/C (56,422) -17.5% 890 0.3%
Net Income (Loss) N/C (107,032) -33.3% $5,163 1.5%
Average Shares --- 103,162,169 --- 106,116,409 ---
53 Weeks 52 Weeks
Percent Fiscal 1996 Pct. Fiscal 1995 Pct.
Change of Sales of Sales
Per Share --- ($1.35) --- $0.42 ---
Sales -13.4% $1,102,384 100.0% $1,272,693 100.0%
Other Income -32.1% 6,355 0.6% 9,358 0.7%
Total -13.5% 1,108,739 100.6% 1,282,051 100.7%
& Occupancy -1.5% 917,764 83.3% 932,138 73.2%
Administrative 5.0% 299,297 27.1% 285,090 22.4%
Interest Expense 59.1% 3,666 0.3% 2,304 0.2%
Expenses 0.1% 1,220,727 110.7% 1,219,532 95.8%
Charge NA 103,000 9.3% 0 0.0%
(Loss) N/C (214,988) -19.5% 62,519 4.9%
Taxes (Benefit) N/C (75,747) -6.9% 17,830 1.4%
Net Income (Loss) N/C ($139,241) -12.6% $44,689 3.5%
Average Shares --- 103,038,224 --- 107,207,660 ---
KINGSTON, Pa., March 20, 1996 - Mark Centers Trust (NYSE:
MCT) announced that Rich's Department
Store has filed for Chapter 11
Bankruptcy protection. Rich's operated one location with Mark
Centers Trust at the Auburn Plaza, Auburn, Maine. Mark Centers
Trust had anticipated the closing of this store and has been
actively pursuing replacement tenants.
Mark Centers Trust is a self-administered equity real estate
investment trust which specializes in the operation, management,
leasing, renovation, and acquisition of shopping centers situated in
underserved retail markets. Based in Kingston, Pennsylvania, the
Trust currently owns and operates 39 properties totalling
approximately 7.2 million square feet, including 34 neighborhood and
community shopping centers, three enclosed malls and two mixed-use
facilities located in the Northeastern and Southeastern United
States. In addition, the company currently has one community
shopping center under construction in New Castle, Pennsylvania.
CONTACT: Stephen Althoff, Vice President, Director of Operations
of Mark Centers Trust, 717-288-4581
NEW YORK -- March 20, 1996 -- RJR Nabisco (NYSE:RN)
said that the company is mailing the following letter to its
March 19, 1996
Dear Fellow Shareholder:
By now you have received two separate sets of annual meeting
proxy materials sent to you by RJR Nabisco and a group controlled by
corporate raiders Bennett LeBow and Carl Icahn. The LeBow/Icahn
group has nominated an alternate slate of directors to replace your
current board and give the LeBow/Icahn group control of RJR Nabisco.
We believe your choice is clear:
You can vote for your current board of directors, which has
demonstrated a commitment to managing RJR Nabisco with the interest
of all shareholders in mind and, having gotten the company out from
under a crushing debt load, is focusing on responsibly maximizing
value for all shareholders; or
You can vote to turn over the company to a new slate of director
candidates that were hand-picked by Bennett LeBow and Carl Icahn,
both of whom have repeatedly demonstrated contempt and reckless
disregard for shareholders at other companies they have controlled.
A vote for the LeBow/Icahn nominees could leave the company in the
hands of two corporate raiders with a history of self-enrichment and
We believe your current board is best able to manage RJR Nabisco
for your benefit, in a responsible way that does not "junk" the
company and ultimately erode value with unsustainable financial
THE BEST WAY TO SAFEGUARD YOUR INVESTMENT IS TO VOTE FOR YOUR
EXISTING BOARD USING THE WHITE CARD.
We strongly urge you to vote for the company's current board of
directors at the annual meeting and to vote on the other proposals
in the manner recommended by your board of directors.
Carl Icahn's exploits as a corporate raider and greenmailer are
In 1985, he gained control of Trans World Airways. In 1992, TWA
was forced to file for bankruptcy and Icahn was required to
relinquish his stock in the company, resign as chairman and loan the
company $190 million to extinguish his liability for the company's
underfunded pension obligations.
In addition, he has forced a number of companies, including
Saxon Industries, Hammermill Paper Co. and Viacom International,
Inc., to pay him "greenmail" at the expense of other shareholders.
Bennett LeBow's corporate abuses are also well chronicled:
At MAI Systems, LeBow acquired a minority position in the
company. He converted his position into a preferred stock holding
and led the company into bankruptcy, wiping out all other
shareholders in the process. LeBow was left with control of the
At Western Union, LeBow gained control of a company with more
than $500 million of debt and $25 million of equity. Under LeBow's
control, Western Union was unable to pay interest on its debt, fired
workers and ultimately filed for bankruptcy.
LeBow's foray into the tobacco business with Liggett is also
cause for grave concern. In the ten years LeBow has controlled the
company, its volume has dropped by almost 50 percent, its overall
market share has fallen by almost half to a mere 2.2 percent and its
total full-price brands' market share have virtually evaporated to
just one-half of one percent.
In all of these cases, the companies involved had boards of
directors, which in theory should have protected shareholders. The
fact is, however, that both raiders have demonstrated time and again
that they are able to impose damaging financial policies on the
companies they control, enriching themselves and leaving other
shareholders with little to show for their investment.
A majority of LeBow's slate of director nominees have direct
financial ties to the LeBow/Icahn group that raise legitimate
questions about their ability or willingness to represent other
shareholders over the financial interests of LeBow and Icahn. LeBow
and Icahn agreed to pay their slate of nominees a total of $450,000
before they are even elected and begin receiving director fees from
RJR Nabisco. This is especially ironic in that LeBow and Icahn, in
their proxy materials to you, claim to support curbs on director
The potential consequences of electing a board slate hand-picked by
Bennett LeBow and Carl Icahn are severe.
Just last week, the LeBow/Icahn group demonstrated how dangerous
its behavior can be to shareholders of RJR Nabisco. In a high-risk
gamble to advance their proxy contest agenda, the LeBow/Icahn group
agreed to a dangerous deal with tobacco litigation plaintiffs. The
news of this development wiped out billions of dollars of stock
market value for holders of RJR Nabisco and other tobacco-related
stocks and demonstrated, once again, how little regard these men
have for the long-term interests of other shareholders.
THE CHOICE IS CLEAR: VOTE FOR THE RJR NABISCO BOARD.
The changes put in place by the company's management are producing
impressive results at RJR Nabisco's operating businesses.
Our debt is significantly reduced, the company is now
financially stable, and we finally are in a position to focus on
business building and shareholder returns. We have made a number of
important strategic, operating and management changes at our
operating businesses to assure that the company can produce strong
financial results that will reward shareholders. The results of
those changes were obvious in the company's operating performance at
The domestic tobacco business turned around its market share
performance after a decline that preceded the leveraged buyout by
more than a decade. In the fourth quarter, full- price market
shares were ahead of the year-ago quarter and the Camel and Doral
brands showed particularly strong growth in shipments and market
share. This progress is a result of a re-energized focus on core
brand marketing and cost-cutting to meet our commitment to deliver
strong earnings to shareholders.
The international tobacco business finished the year with
double-digit volume and earnings growth, posting a strong recovery
from export disruptions early in 1995 in the Middle East and Russia
and putting the business on track for continued strong performance
Nabisco has grown revenue significantly and increased its
leading market shares in recent years despite intense competition in
the U.S. biscuit and nut markets. The company has also built a
substantial international business. Wall Street has greeted our
initial public offering of Nabisco shares enthusiastically,
demonstrating its belief that Nabisco has a terrific future ahead of
With our businesses on track for a strong 1996, the company will
have the resources needed to enrich shareholders directly and assure
the company's businesses can sustain their performance in the
RJR Nabisco is committed to using using more of its growing cash
flow to reward shareholders.
The board recently adopted an important change in the company's
financial policy to return increased levels of RJR Nabisco's free
cash flows to shareholders. The policy results in two immediate
A 23 percent increase in RJR Nabisco's annual common dividend
rate to $1.85 per common share from $1.50 per common share ($.465
per common share from $.375 per common share on a quarterly basis,
effective as of the April 1, 1996 dividend).
The adoption of a share repurchase objective of approximately
10 million common shares over the next several years based on the
achievement of performance targets, and the immediate authorization
by the board for the company to repurchase up to $100 million of
stock in 1996.
We took these financial actions because of the company's
tremendous earnings potential, now that its finances are in order
and its businesses are on track.
The RJR Nabisco board is committed to maintaining a level of
financial integrity for the company that will enable
it to build on its ability to reward shareholders
in a sustainable fashion.
While our financial policy represents a dramatic change, it is a
prudent change. We did not "junk" RJR Nabisco. We did not promise
a dividend level beyond what we believe we can realistically
maintain. We did not starve the rapidly growing international
tobacco business that will play an increasingly important role in
the company s future ability to return value to shareholders. We
approved a payout that should maximize value for you today while
maintaining prospects for future growth in the value of your
The RJR Nabisco board of directors is committed to a successful
spin-off of Nabisco.
The board of directors is committed to spinning off Nabisco as
soon as we believe that it can be done successfully. Your board has
already taken a number of steps that were necessary to allow a spin-
off when it will not jeopardize your investment.
In raising the dividend rate to $1.85 on an annualized basis, we
have increased your common dividend to a level that reflects the
dividend income the company receives from its 80.5 percent interest
in Nabisco as well as the performance of the tobacco businesses.
We believe this approach is a responsible means of allowing
shareholders to participate in Nabisco dividend income until we can
achieve an actual spin-off for you.
The RJR Nabisco board is committed to a structure
that benefits all shareholders.
Over the past 18 months, the company has evolved from a company
controlled by one leveraged buy-out investment firm to a company
with broad, public ownership. Your board recently voted to form a
new corporate governance and nominating committee of the board to
provide a formal means of determining what additional steps are
necessary to complete the company's transition. The committee will
be limited to outside directors of the company and will be chaired
by former Assistant Secretary of State Rozanne Ridgway.
In carrying out its responsibilities, the corporate governance
and nominating committee will review and recommend appropriate
changes regarding board policies, including director compensation,
and recruit additional outside directors committed to managing the
company responsibly for your benefit.
We urge you NOT to sign or return the BLUE proxy cards
sent to you by the LeBow/Icahn group or its
agents, including Brooke Group.
We ask you to sign, date and return the accompanying WHITE card,
using the enclosed postage-paid envelope, indicating your support of
the company's board and management. If you have any questions or
need assistance in completing the enclosed WHITE card, please call
our solicitors: MacKenzie Partners, Inc., toll free, at 1-800-322-
2885 or D.F. King & Co., Inc., toll free, at 1-800-290-6430.
On Behalf of Your Board of Directors,
Charles M. Harper Steven F. Goldstone
Chairman President and
Chief Executive Officer
CONTACT: RJR Nabisco Holdings Corp., New York
Carol Makovich, (212) 258-5785