Christopher & Banks

Ticker
$CBK
Buy Price
$2.07
Holding Type
Option
Investment Theme
Turnaround
Open/Closed
Closed
Trade Date
January 12, 2017

Bought this at $2.07 per share.

There are 37.4m shares out for a $77.5m market cap. There is no debt and $26m in cash for a $51.5m EV. This retailer is in the midst of a turnaround, closing underperforming stores and rationalizing costs. Revenue is expected to be $390m for 2017 (0.13x EV/Sales) and EBITDA is projected to be $7m (7.4x). Management guided to $5-7m in cost savings for 2017.

Comps have been better than the industry. Past 3 quarters: +4.5%, -5.8%, +6%. Store count has dropped from 538 in 3Q16 to 504 in 3Q17.

UPDATE: On 1/17/17, CBK announced comps would be down 7-8% in Q4, the CEO resigned, and yearend cash would be approximately $30m. The stock fell nearly 40% to $1.30/share. The new share price puts market cap at $49.3m and EV at $19.3m (using yearend cash of $30m). Full year 2016 revenue should be $380m (0.05x EV/Sales). The trouble is in determining whether this brand is dead/dying.