They call it the retail graveyard, because no matter how hot a store may be in its heyday, odds are it won't outduel Father Time. When a retailer is down to its last stitch of mojo, it is buried like others that once might have been considered immortal (John Wanamaker, Borders, Circuit City).
So it goes with one of the region's oldest remaining apparel chains: Fashion Bug. Sprung from what began as a Philadelphia retailer 70 years ago, it is on a death march to its final resting place, a casualty in the fierce competition to sell moderately priced clothes and accessories to women.
The specialty chain — a mainstay of strip shopping centers since its first store opened (and still stands today) on the Black Horse Pike in Audubon, N.J., in the 1960s — will disappear in the coming months after a failed struggle to hold its own against Walmart, Kohl's, and others now popular among budget-conscious, or so-called middle-market, shoppers.
The order to do away with Fashion Bug and its mixed assortments for women of all shapes and sizes comes from Ascena Retail Group Inc., which bought the chain and its sister brands Lane Bryant and Catherines in a deal valued at nearly $900 million earlier this month. All three chains had formed the core of Bensalem-based Charming Shoppes Inc., a company that began trading publicly on Wall Street in 1971.
About half of Fashion Bug's 600 stores are expected to vanish by year's end, when their leases expire. The fate of the others is less clear.
Some may be converted to Dress Barn, Justice, or Maurices stores — brands already owned by Ascena, a Suffern, N.Y.-based corporation that paid Charming Shoppes stockholders $7.35 a share in the deal that closed June 15. Administrative offices for what is left of Charming Shoppes remain in Bensalem, for now.
Ascena did not make company officials available for this article, but on the day of the acquisition, president and chief executive David Jaffe spoke enthusiastically about Charming's two plus-size apparel brands, Lane Bryant and Catherines. Both are viewed as strong because they market decisively to larger-size women with fashionable merchandise.
That same day, however, Jaffe wasted no time waffling about Fashion Bug. He announced that the increasingly unprofitable chain — which Charming Shoppes had unsuccessfully tried to divest before the sale — would be shut down by early 2013.
"The Lane Bryant and Catherines businesses are extremely complementary to our other concepts, and we expect them to integrate seamlessly," Jaffe said in a prepared statement that day.
Fashion Bug had been on the skids for years, after rapidly expanding through the 1970s into the early 1990s, when Charming Shoppes was still largely being run by members of the founding Sidewater and Wachs families.
"Specialty retail and fashion is a really tough game," said Erin Armendinger, managing director of the Jay H. Baker Retailing Center at the Wharton School of the University of Pennsylvania, where Ascena's Jaffe and onetime Charming Shoppes chief executive Dorrit Bern are board members. "You're only as good as your last season."
"I think it really started to turn sour [for Fashion Bug] when you started to see the acceleration of the Wal-Marts and the Kohl's of the world," said Thomas A. Filandro, senior consumer analyst at Susquehanna Financial Group, who has followed Charming Shoppes for the investment community for about 20 years.
Big-box chains like those have snapped up the customers who, decades earlier, used to turn for moderately priced stylish fashions to specialty stores such as Fashion Bug that competed with department stores.
Morris and Arthur Sidewater opened their first store, Charming Shoppes, on Frankford Avenue in Philadelphia in 1940. They teamed up with David and Ellis Wachs to open a second store in Norristown a decade later. Their first Fashion Bug made its debut in that Audubon, N.J., shopping center in the 1960s.
By the early 1990s, Fashion Bug had opened its 1,000th store. But things had already begun to unravel.
In August 1995, the company hired Bern, a former executive at Sears, Roebuck & Co., as CEO, to rein in and restructure the company. She led Charming Shoppes through a series of acquisitions that transformed it into a major player in the design, manufacture and sale of clothing for plus-size women.
Charming bought the Modern Woman plus-size apparel chain in 1999, the 433-location Catherines Stores Corp. in 2000, and 651 stores belonging to Lane Bryant in 2001.
But Fashion Bug stores came to be less focused — a business model doomed by the arrival of the big boxes and their low-priced apparel in some of the very same shopping centers. Stocked with an assortment of plus-size apparel alongside clothing for smaller women and, with varying reliability, offerings for juniors, the mix did not stand out.
"If I asked 1,000 people, `What does Fashion Bug mean to you?' they'd say, 'Who's Fashion Bug?'?" Filandro said.
The chain's decline was precipitious. As recently as 2007, more than 1,000 Fashion Bug stores generated $1 billion in annual sales, Filandro said.
Then, between 2007 and 2011, about 400 Fashion Bug stores were shuttered. The company also lost Bern as CEO in a pitched proxy battle with hedge-fund investors.
In 2010, Fashion Bug's annual sales had fallen to $668.7 million. Last year, amid the closure of even more stores, sales dropped to $581.6 million, and Charming Shoppes launched a strategic review that led to its sale.
"You cannot successfully operate with this dual strategy of trying to be a plus-size merchant right alongside a junior and missy merchant," Filandro said, reiterating the convoluted selections. "You have to make a decision: Who do you want your target market to be?"