Charming Shoppes Rises After Cost-cutting Plan

NEW YORK (AP) — Shares of Charming Shoppes Inc. rose on Wednesday after the operator of Lane Bryant and the Fashion Bug said its adjusted fourth-quarter loss was smaller than analyst expected and said it would implement more cost cuts.

Shares rose 17 cents, or 14.3 percent, to $1.36 during afternoon trading. The stock has traded between 45 cents and $6.35 over the past 52 weeks.

The company said that, excluding one-time charges, it lost 34 cents per share. Analysts polled by Thomson Reuters predicted a loss of 38 cents per share.

The company also said it will reduce capital expenditures by half to $24 million and close its Figure Magazine, effective immediately, and the closing of the shoetrader.com Web site in the second half of the year.

The company said it expects to save about $125 million during the current fiscal year.

C.L. King analyst Scott D. Krasik said in a note to investors that cost cutting, organizational restructuring and reducing inventory helped results in 2008. He reiterated his "Buy" rating on the stock.

"By managing expenses conservatively last year and cutting (capital expenditures) and expenses further in 2009, we believe the company will exit this recession a leaner and more focused retailer ready to leverage its leading market share in plus-sized women's apparel," he wrote.