Can This Omni-Channel Specialty Retailer Continue To Outperform And Beat The Sector?

| About: Christopher & (CBK)

Summary

In Q3 2015, the market overreacted and Christopher & Banks Corporation plunged because of a single-digit percentage downward revision.

The "low hanging fruit" isn't there anymore because the stock has rallied gaining 100% over the last five months.

However, this omni-channel specialty retailer remains debt-free while taking key initiatives to turn things around.

Based on the company's guidance for Q1 2016, the YoY improvement in sales trend and gross margin is obvious although the restructuring plan hasn't been completed yet.

There is still significant upside left, because the stock at $2.32/share isn't expensive in absolute or relative terms.

Introduction

Would you be interested in making 100% in just five months by buying a low-risk retailer in a challenging retail industry that has struggled with weather-related obstacles, high inventory levels and sluggish bricks-and-mortar traffic? I am sure, you would. Well, you could double your money in just five months if you bought Christopher & Banks Corporation (NYSE:CBK) at $1.28/share in Sep - Oct 2015, when I recommended the subscribers to my Premium Research buy it with both hands.

The company's stock hit $2.70/share a few days ago and currently stands at $2.32/share. Therefore, you understand now why I noted in my previous article that I will definitely pass Macy's (NYSE:M) at $44.5/share. And given that Restoration Hardware Holdings (NYSE:RH) currently stands at $37/share, now you realize why I recommended my subscribers short this luxury retailer at $105/share just five months ago.

As investment newsletter editor and stock picker, my number one purpose is to maximize my subscribers' returns by picking stocks that combine significant upside or downside potential with manageable risk, based on a 12-month investment horizon. And Macy's didn't fit the bill. But, Restoration Hardware did.

The Reasons For The Recent Collapse

It was back in September 2015, when the short-sighted market heavily penalized Christopher & Banks making it look like it's the worst of the bunch in the retail sector. Back then, the company's enterprise value plunged below $20 million just because many companies trade based on results relative to consensus estimates. The inexperienced investors always overreact to the news (good or bad) without digging into the fundamentals.

Click to enlarge

To me, that was the epitome of insanity. To me, that was the epitome of hyperbole, given that, among others, the company was debt-free while the holiday shopping season was coming. And, I always welcome a stock whose valuation goes to "head-scratching" levels.

That said, the stock collapsed in Q3 2015 for the following key reasons:

1) Revised guidance for 2015: On August 13, 2015, Christopher & Banks released its preliminary results for the second quarter. Christopher & Banks revealed that it expected to report net sales of approximately $94 million, which was below its previous guidance of between $100 million and $103 million, which was just a single-digit percentage downward revision. As such, the company said that it didn't expect to meet its full-year forecasts. Analysts had estimated $102.3 million on average.

2) Exit from S&P SmallCap 600 : The second hit came in mid-September 2015 when S&P announced that SPX FLOW Inc. (NYSE:FLOW) would replace Christopher & Banks in the S&P 600 after the close of trading on Friday, September 25. Also, S&P stated CBK "is ranked near the bottom of the S&P SmallCap 600 and is no longer appropriate for that index." As such, several index funds had to rebalance and adjust their positions accordingly. By saying index funds, I am talking about funds that comply with specific rules of construction regardless of market conditions. On that front, companies are purchased and held within the index fund when they meet the specific index rules or parameters and are sold when they move outside of those rules or parameters.

Christopher & Banks Has Outperformed Its Peers And The Retail Sector Lately

Since Q3 2015, many retailers have disappointed their shareholders and have seen their stocks drop significantly, such as Macy's , Nordstrom (NYSE:JWN), Men's Wearhouse (MW) which is now Tailored Brands (NYSE:TLRD), Aeropostale Inc. (NYSE:ARO), G-III Apparel Group (NASDAQ:GIII), Ralph Lauren (NYSE:RL) and Sequential Brands Group Inc. (NASDAQ:SQBG), to name a few. And many other have had a flattish performance thus far, such as Urban Outfitters Inc. (NASDAQ:URBN), Gap (NYSE:GPS), Guess? (NYSE:GES), Buckle Inc. (NYSE:BKE) and American Eagle Outfitters (NYSE:AEO).

A bunch of them, including Macy's and Nordstrom, have been blaming their poor business on the weather. Truth is that the mild winter didn't help the retail industry and many shoppers didn't go out for winter clothes shopping. But this isn't the key reason why investors have lost a significant amount of money from the vast majority of the retailers since Q3 2015.

The key reasons behind this ugly or flattish performance are the fierce competition as well as shifting consumer patterns, particularly among the millennial generation.

Given that a picture is worth a thousand words, this is the SPDR S&P Retail ETF (NYSEARCA:XRT):

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and this is the Consumer Discretionary Select Sector SPDR ETF (NYSEARCA:XLY):

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And this is the company's performance since late September 2015 when I recommended the subscribers to my Premium Research load it at $1.28/share:

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Obviously, the company's stock has rallied more than 100% over the last six months proving the fundamental investors right and the inexperienced ones absolutely wrong. And now, the next question is: Is Christopher & Banks still irrationally cheap in either absolute or relative terms? Is there any upside left?

Christopher & Banks Is In A Transition Period In A Niche Market

As of March 2016, the company operates 514 stores consisting of 314 Missy-Petite-Women (MPW) stores, 77 Outlet stores, 65 Christopher & Banks stores and 58 stores in its women's plus size clothing division CJ Banks. Also, it operates an eCommerce website where the customers can find an expanded assortment of sizes, lengths and colors.

For reference, and as of October 2015, it operated 535 stores consisting of 314 MPW stores, 70 Outlet stores, 80 Christopher & Banks stores and 71 stores in its women's plus size clothing division CJ Banks.

That said, the message is clear. The company is in a transition period by opening new Outlet stores, closing some of its Christopher & Banks (CB stores) and C.J. Banks stores (CJ stores) while also converting the remaining ones into MPW stores that have higher sales per square foot, higher gross margin and higher operating margin than standalone CB and CJ stores.

The key here is that this retailer has a niche market targeting primarily professional women between 45 and 60 years old, who are looking for a fresh and colorful mix of classic clothing in quality products and accessories at a great value, as illustrated below:

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The company has also been embracing the plus-size trend by owning a plus-size clothing division. Plus size for women is generally considered size 14 and up. This is a niche market with huge potential and limited competition to date coming primarily from Lane Bryant and Catherine's, both owned by Ascena Retail Group (NASDAQ:ASNA), Cato Corporation (NYSE:CATO), Chico's FAS (NYSE:CHS), Target's (NYSE:TGT) AVA & VIV and a few online players such as Eloquii, ModCloth and subscription-based Gwynnie Bee.

Specifically, the plus-size apparel market generated $17.5 billion in sales between May 2013 and April 2014, up 5% from the year prior, according to market research firm The NPD Group. According also to market research by online retailer ModCloth, 77% of plus-size women say it is difficult to find well-fitting garments, 73% say sizing is inconsistent across brands and 81% say they would spend more on clothing if they had more options in their size.

Christopher & Banks Won't Visit The Banks Remaining Debt-Free In 2016

The company has been in a transition period over the last twelve months, and therefore, it's not surprising that it burned cash of approximately $16 million in 2015, while its net sales fell short of analysts' expectations. Actually, annual net sales declined almost 9% and totaled $383.8 million, while operating loss in 2015 hit $11.3 million, compared to operating income of $9.4 million in 2014.

Also, comparable sales decreased 8.3%, compared to $418.6 million in 2014. However, the SSS figure is misleading and inaccurate. First, this metric includes only remaining stores that haven't been converted to the MPW concept yet and therefore, doesn't mirror the sales growth coming from the majority of the newly converted MPW stores, which are classified as new stores. Specifically, this SSS metric doesn't include a key part of the restructuring plan but includes only the stores that have been in operations for over 13 months, according to the company's 10K. Second, the ongoing renovations on the stores that have been in operations for over 13 months, result in temporarily slowed traffic. In other words, store remodeling usually translates into sales interruptions. And third, comparable sales decreased 3.4% in the fourth quarter of fiscal 2015, while comparable sales decreased 8.3% on an annual basis. Therefore, there is a gradual improvement on this SSS figure which is going to continue this year, primarily in H2 2016, given that the MPW rollout will be completed by June 2016.

In addition, it must be noted that:

1) Inventory per square foot, excluding in-transit and eCommerce inventory, decreased approximately 12.9% to $14.20 per square foot, as of January 30, 2016, as compared to January 31, 2015.

2) The company remained debt-free with its total cash/cash equivalents/short-term investments being $34.5 million as of January 2016.

3) It generated positive operating CF of approximately $8.5 million in Q4 2015. And excluding the impact related to deferred tax assets ($37.5 million in Q4 2015), it generated positive operating CF of approximately $7 million in Q4 2015.

4) It generated free CF of approximately $7 million in Q4 2015. And excluding the impact related to deferred tax assets ($37.5 million in Q4 2015), it generated free CF of approximately $5.5 million in Q4 2015.

5) The investments in the digital marketing are paying off. The company's e-commerce sales showed continued acceleration with double-digit growth on a year-over-year basis. The eCommerce channel remained strong exceeding expectations, and the company expects this channel sales growth to continue to outperform brick-and-mortar in 2016. For reference, online sales represent more than 15% of total sales, which is a meaningful portion of the company's annual revenue.

6) Given that the restructuring period ends in 2016, major CapEx is behind the company. 2016 CapEx will be about $11.5 million, down significantly from $26.5 million in 2015.

7) Based on the guidance for Q1 2016, Christopher & Banks will lose money this quarter, but the first quarter is traditionally considered to be a weak quarter not only for this company but also for the vast majority of the retailers.

The thing is that the company sees some key improvements in its sales trends and margins in Q1 2016 as compared to last year. Specifically, it guides that total net sales in Q1 2016 will be between $93.0 million and $98.0 million, as compared to net sales of $91.6 million in last year's first quarter, while gross margin is projected to be 35.4% to 36.0% as compared to last year's 35.2%.

Assuming that the sales growth trend and margin improvement continue in the coming quarters coupled with the completion of the MPW conversion, I expect that the benefits from these strategic initiatives will accelerate in H2 2016. Therefore, I estimate that the company will remain debt-free while generating approximately $420 million annual revenue that translates into approximately $150 million gross profit in 2016, based on gross margin of 35.6%. Given also that SG&A will be between approximately $35.6 million and $36.0 million in Q1 2016 based on the latest guidance, I expect the company to reach a break-even point or be slightly profitable in 2016.

8) As linked above, 2016 CapEx will be just $11.5 million, which is $15 million less than 2015 CapEx. Given also that the annual operating CF in 2016 is estimated to be approximately $16 million (my estimate), the free CF in 2016 will be approximately $5 million bringing the company's cash to about $40 million by year end.

For reference, the company generated $19 million operating CF in 2014, based on $419 million annual revenue and 35% gross margin. And in 2013, it generated $25 million operating CF, based on $436 million annual revenue and 34.7% gross margin. Depreciation hasn't changed substantially ranging between $11.9 million and $13.3 million over the last three years, and it will be about $12 million in 2016 based on the most recent guidance.

Key Points From The Business Plan For 2016

Christopher & Banks will complete its ongoing restructuring plan and its MPW conversion strategy, which is designed to improve the overall productivity of its store base, by H1 2016.

As part of this effort, the niche retailer will focus on a localized merchandise assortment tailored to each store according to category preferences, size, geography and channel. Also, the new business intelligence tool will provide a considerably higher level of visibility into the products at the store level, enabling better upfront assortment planning, with tailored store buys to maximize sales and inventory.

In addition, it will implement a new targeted marketing program with increased offers and promotions through friendship rewards, coupons, private label credit cards (PLCC), bounce backs and deal sites. On that front, it's more than doubling its direct mail sends as compared to the spring 2015.

Furthermore, the recent upgrade to the CRM system that was completed in August 2015, provides the foundational infrastructure that enables the company to centralize its data for consistent understanding of the customer.

And the icing on the cake is the new website that will be launched in the spring of 2016. This is expected to offer remarkably improved customer experience, given that the omni-channel strategy remains a priority and the company continues to see opportunity for accelerated growth in its eCommerce business, which generated more than 15% of the total sales in 2015.

Christopher & Banks Still Has Upside Potential On A Relative Valuation Basis

In this paragraph, we will take a close look at the company's key metrics compared to the peer group that includes small and medium-sized apparel retailers whose products either primarily target women or both sexes. The valuations below are based on the closing prices as of 03/24/2016:

1) Net Debt/Adjusted EBITDA:

Company

Net Debt

(Jan 2016)

($ million)

Adjusted EBITDA

FY 2016

($ million) (*)

Net Debt

----------

Adjusted EBITDA

FY 2016

Aeropostale Inc.

56.2

Negative

Undefined

Pacific Sunwear

of California (NASDAQ:PSUN)

122 (**)

15

8.13

The Bon-Ton

Stores Inc. (NASDAQ:BONT)

855

145

5.9

Vince Holding

Corp. (NYSE:VNCE)

75 (**)

25

3

Stein Mart Inc.

(NASDAQ:SMRT)

178

70

2.54

Destination XL

Group (NASDAQ:DXLG)

63

33

1.91

Stage Stores

Inc. (NYSE:SSI)

147

80

1.84

Destination Maternity

Corp. (NASDAQ:DEST)

43 (**)

25

1.72

Chico's FAS

Inc.

-48

270

-0.18

Francesca's Holdings

Corp. (NASDAQ:FRAN)

-56

85

-0.66

Vera Bradley

Inc. (NASDAQ:VRA)

-98

70

-1.4

The Cato

Corporation

-287

120

-2.39

Christopher & Banks Corp.

-34.5

8

-4.31

Click to enlarge

(*): Estimate for the FY 2016 ending on 01/31/2017, based on the company's guidance and results to date.

(**): As of Oct 2015.

2) The Acid Test ratio: When it comes to evaluating the retailers, investors often focus on the current ratio and whether it stands higher than 1 times. At first glance, the current ratio (current assets/current liabilities) looks a decent metric, but this is not enough. The canny investors will always look at the Quick Ratio or the "Acid Test" Ratio which is defined as:

Acid Test Ratio = (Current assets - Inventory) : Current liabilities

This ratio is a strong indicator of the company's liquidity and whether a firm has sufficient short-term assets to cover its immediate liabilities. This ratio ignores illiquid assets such as inventory and should exceed 1 times. Companies with an acid-test ratio of less than 1 times don't have the liquid assets to pay their current liabilities but they are highly dependent on inventory:

Company

Acid Test Ratio

Stein Mart Inc.

0.16

Destination XL Group

0.17

Pacific Sunwear of California

0.19

The Bon-Ton Stores Inc.

0.30

Stage Stores Inc.

0.42

Vince Holding Corporation

0.47

Destination Maternity Corporation

0.49

Aeropostale Inc.

0.61

Chico's FAS Inc.

0.78

Christopher & Banks Corporation

1.09

The Cato Corporation

1.72

Vera Bradley, Inc.

2.11

Francesca's Holdings Corporation

2.6

Click to enlarge

3) EV/Adjusted EBITDA:

Company

EV ($ million)

Adjusted EBITDA

FY 2016

($ million) (*)

EV

-----------

Adjusted EBITDA

FY 2016

Aeropostale Inc.

95

Negative

Undefined

Vince Holding Corp.

310

25

12.4

Destination

XL Group

310

33

9.39

Vera Bradley Inc.

650

70

9.29

Francesca's

Holdings Corp.

740

85

8.71

Pacific Sunwear

Of California

130

15

8.67

Stein Mart Inc.

510

70

7.29

Christopher &

Banks Corp.

52

8

6.5

The Bon-Ton

Stores Inc.

900

145

6.21

The Cato

Corporation

720

120

6

Destination

Maternity Corp.

150

25

6

Chico's FAS Inc.

1,600

270

5.93

Stage Stores Inc.

380

80

4.75

Click to enlarge

(*): Estimate for the FY 2016 ending on 01/31/2017, based on the company's guidance and results to date.

4) EV/Annual Sales:

Company

EV

---------------

Annual Sales FY 2016 (*)

Francesca's Holdings Corporation

1.54

Vera Bradley Inc.

1.25

Vince Holding Corp.

1.03

The Cato Corporation

0.72

Destination XL Group

0.66

Chico's FAS Inc.

0.62

Stein Mart Inc.

0.36

The Bon-Ton Stores Inc.

0.32

Destination Maternity Corporation

0.28

Stage Stores Inc.

0.25

Pacific Sunwear Of California

0.16

Christopher & Banks Corporation

0.12

Aeropostale Inc.

0.06

Click to enlarge

(*): Estimate for the FY 2016 ending on 01/31/2017, based on the company's guidance and results to date.

As shown above, the company's balance sheet and key metrics support the bullish case, although my EBITDA estimate for FY 2016 was modest. At the current price of $2.32/share, debt-free Christopher & Banks is priced for bankruptcy same like heavily-indebted Pacific Sunwear of California and Aeropostale.

Christopher & Banks Still Has Upside Potential From An Acquisition Viewpoint

Although Christopher & Banks has risen significantly over the last weeks, there is still room for stock price appreciation on a relative valuation basis, as presented in the previous paragraph. And Christopher & Banks still has upside potential, based on the recent deals between niche firms from the consumer goods sector. Specifically:

1) Just a few months ago, Ascena Retail Group completed the acquisition of its rival ANN Inc. (NYSE:ANN) strengthening its position in women's specialty apparel retailing and expanding its product offerings primarily for the missy and plus-size women. Upon completion of the acquisition, ANN's Enterprise Value was approximately $1.9 billion that translated into 7.5 times and 0.75 times its estimated adjusted EBITDA and its estimated annual sales for FY 2015, respectively.

2) In June 2015, Boot Barn Holdings (NYSE:BOOT) acquired privately-held Sheplers, a western lifestyle company, for $147 million. Sheplers, Inc. had 25 retail locations across the United States and an e-commerce business. Given that Sheplers had adjusted EBITDA and annual sales of approximately $14.9 million and $157 million, respectively, it was acquired for almost 10 times and almost 1 times its annual adjusted EBITDA and its annual sales, respectively.

3) In 2014, Men's Wearhouse (MW) acquired rival retailer Jos. A. Bank for $65/share that translated into Enterprise Value of approximately $1.4 billion. Given that Jos. A. Bank's estimated adjusted EBITDA and annual sales for 2014 were approximately $90 million and $900 million, respectively, the retailer was acquired for approximately 15.5 times and 1.55 times its annual adjusted EBITDA and its annual sales, respectively.

4) In 2014, Columbia Sportswear Company (NASDAQ:COLM) acquired privately-held PrAna Living LLC for $190 million, adding yoga and rock-climbing women's and men's clothing (i.e. yoga leggings, stretch jeans and shirts woven with organic cotton) to its product offerings. According to Columbia's press release, the $190 million purchase price equated to approximately 13 times PrAna's projected EBITDA for 2014.

To sum it up:

EV

--------

Annual Adjusted EBITDA (*)

EV

--------

Annual Revenue (*)

Ascena Retail Group -

ANN

7.5

0.75

Boot Barn Holdings -

Sheplers

10

1

Men's Wearhouse -

Jos. A. Bank

15.5

1.55

Columbia Sportswear -

PrAna Living LLC

13

-

Click to enlarge

(*): FY 2015.

Based on these key acquisition metrics, the potential suitor could pay about 8 times the annual adjusted EBITDA and/or 0.5 times the annual revenue, given also that the company is debt-free. That said, and based on my modest estimate for positive CF of approximately $16 million and free CF generation of approximately $5 million this year resulting in $40 million cash/short-term investments by year end, these are two key scenarios on a potential deal in H1 2017:

1) EV = 8 times X $8 million (estimated annual adj. EBITDA in 2016) = $64 million = Market Cap + Net Debt.

Market Cap = $64 million + $40 million (estimated cash and short-term investments in Dec 2016) = $104 million or $2.8/share.

2) EV = 0.5 times X $420 million (estimated annual revenue in 2016) = $210 million = Market Cap + Net Debt.

Market Cap = $210 million + $40 million (estimated cash and short-term investments in Dec 2016) = $250 million or $6.73/share.

Therefore, the acquisition offer on a buyout scenario could near $4/share, which represents a significant upside from the current levels.

A Sale Is Very Likely With Macellum Advisors On Board

In this paragraph, it's worth presenting some past events along with the latest developments regarding Macellum Advisors GP, LLC, its stake in Christopher & Banks and the implications for the company's future.

In April 2015, Macellum stated its belief that the Board of Directors had not exercised good oversight, governance or leadership and the company should look internally for solutions. Macellum also highlighted its additional concerns over the deterioration in the company's results and believed that with proper governance and oversight, the company would be capable of achieving high single digit operating margins and meaningful revenue growth by gaining back lost market share within its target demographic. Additionally, it stated that several firms had shown heightened interest in Christopher & Banks, and the retailer should explore a potential sale to maximize shareholder value. However, Christopher & Banks rejected Macellum's request to add directors to the Board, including former CEO Joel Waller.

In May 2015, according to NY Post, Christopher & Banks hired Perella Weinberg Partners, a New York investment bank, to explore a possible sale. It must be noted here that LuAnn Via, the company's CEO, had previously headed Payless which was sold to private equity, and the same investment bank (Perella Partners) handled that transaction.

In June 2015, Macellum owned 5.1% of the company. And it sent another letter saying that "the company can no longer blame the West Coast port strike for its declining results and the company must look internally for solutions." Macellum highlighted its additional concerns over the deterioration in the company's results and repeated that with proper governance and oversight, the company would be capable of achieving high single digit operating margins and meaningful revenue growth by gaining back lost market share within its target demographic. Moreover, Macellum stated its belief that with the trend toward consolidation in the missy sector, highlighted by Ascena Retail Group Inc. agreeing to purchase ANN Inc., the company would be an attractive target and should formally begin a process to explore strategic alternative. On the M&A front, Chico's FAS Inc. shares rose significantly in September 2015 on renewed speculation that the women's apparel chain was a buyout target. Specifically, Sycamore Partners approached Chico's, made an offer and was lining up financing, according to one of the people familiar with the situation. Although the Chico's FAS deal hasn't materialized yet (and it may never materialize), this approach proves that there is still M&A interest in the retail sector and deals with niche players like the ones presented in the previous paragraph are very likely in the coming quarters.

And finally, it seems that Macellum and Christopher & Banks found common ground in March 2016. Based on the latest agreement linked above between the company and Macellum, six existing directors will not stand for re-election and four new independent directors will stand for election at the company's 2016 Annual Meeting of Stockholders, including Jonathan Duskin, who has been Macellum's CEO since 2009.

And it's not accidental that Macellum Advisors has increased its stake lately and currently owns approximately 8.4% of Christopher & Banks. Macellum Advisors has substantial experience investing in the consumer goods sector and helping companies improve their long-term financial and share price performance. Specifically, Macellum's historical investments include stakes in The Children's Place (NASDAQ:PLCE), G-III Apparel Group , Ascena Retail Group's Charming Shoppes, PVH Corporation's (NYSE:PVH) Warnaco and privately-held Collective Brands and Hot Topic.

After all, a sale is very likely, once Macellum's representatives get their seats on the Board of Directors and the company completes its restructuring plan by June 2016.

Insider Purchases

Although the insiders ownership is low (approximately 3%), several insiders have added to their positions since H2 2015. Specifically:

1) In December 2015, insiders bought 206,000 shares with the CEO alone buying 100,000 shares at $1.11/share.

2) In June 2015, insiders bought approximately 51,000 shares at prices between $4.06/share and $5.27/share.

Takeaway

When it comes to Christopher & Banks Corporation, its stock crashed a few months ago because of a single-digit percentage downward guidance revision. Since then, it has rallied 100% and the undervaluation gap has narrowed, primarily thanks to the promising Q4 2015 results and the guidance for Q1 2016 that showed a noticeable improvement on several fronts (i.e. sales trend, gross margin, free CF).

However, there is still upside left for several reasons. The company isn't an ailing retailer with a debt overhang struggling for financing like Pacific Sunwear of California. And, it doesn't have whopping key ratios either compared to the peers.

In addition, it has a debt-free balance sheet with plenty of liquidity while it's estimated to generate positive operating CF in 2016, based on its Q1 2016 guidance and the completion of the restructuring plan by June 2016.

Furthermore, it doesn't target teenagers who have been changing spending patterns by diverting their dollars away from fashion with food and electronics taking a greater percentage of their wallets. In contrast, it has an underserved niche market with few competitors targeting a specific set of customers within a particular age range (females 45-60 years of age) whose approach to fashion doesn't change overnight, which is a key contributing factor for high retention rate and customer loyalty.

After all, there is a pretty good likelihood that you will make money if you buy this omni-channel specialty retailer at the current price of $2.32/share and wait by early 2017. Activist investor Macellum Advisors can definitely help you achieve this target.

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Disclaimer: The opinions expressed here are solely my opinion and should not be construed in any way, shape, or form as a formal investment recommendation. Investors are reminded that before making any securities and/or derivatives transaction, you should perform your own due diligence. Investors should also consider consulting with their broker and/or a financial adviser before making any investment decisions.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I recommended the subscribers to my Premium Research buy Christopher & Banks at $1.28/share in September-October 2015.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.