8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d)

Of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 9, 2008

CHRISTOPHER & BANKS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-31390	06-1195422
(Commission File Number)	(IRS Employer
	Identification No.)

2400 Xenium Lane North

Plymouth, Minnesota  55441

(Address of Principal Executive Offices)  (Zip Code)

(763) 551-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On April 9, 2008, Christopher & Banks Corporation (the “Company”) issued a press release disclosing material nonpublic information regarding the Company’s operating results for its fourth fiscal quarter and fiscal year ended March 1, 2008.  In the press release, the Company also announced that it anticipates its fiscal 2009 first quarter earnings per diluted share to range from $0.25 to $0.27.  The Company’s earnings guidance reflects the expectation that first quarter same-store sales will be roughly flat as compared to last year’s first quarter.

The press release issued on April 9, 2008 is furnished as Exhibit No. 99.1 to this Current Report on Form 8-K and should be read in conjunction with the registrant’s reports on Forms 10-K, 10-Q and 8-K, and other publicly available information, which contain other important information about the registrant.

The information in this Current Report on Form 8-K, including Exhibit No. 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.

Item 2.06 Material Impairments.

Following the completion of the fourth quarter, the Company completed a review of its long-lived assets in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”).  In addition, the Company reviewed its goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”).

The Company concluded on April 9, 2008 that, based on its review of the current and projected future performance of certain under-performing stores, the carrying value of the assets at these stores exceeded the estimated fair values of these assets and the Company would record a pre-tax, non-cash charge of $6.0 million related to the impairment of these stores’ assets under SFAS No. 144.  Of this amount, $5.6 million related to the Company’s Acorn division.

In addition, because the SFAS No. 142 impairment test indicated that the estimated value of the goodwill attributable to Acorn was less than its respective carrying amount, on April 9, 2008 the Company concluded it would record a pre-tax, non-cash charge of $3.6 million to impair the full amount of goodwill related to Acorn.

The impairment charges under SFAS No. 144 and SFAS No. 142 are not expected to result in any future cash expenditures and do not affect the Company’s current cash position.

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Item 7.01 Regulation FD Disclosure.

On April 9, 2008, the Company issued a press release announcing, among other things, the material impairment described in Item 2.06 of this Form 8-K.  A copy of the Company’s press release is furnished with this Form 8-K and attached hereto as Exhibit 99.1. Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing or document.

Item 9.01 Financial Statements and Exhibits.

(a)Financial statements:  None.

(b)Pro forma financial information:  None.

(c)Shell company transactions:  None.

(d)Exhibits:

99.1Press release issued by the Company on April 9, 2008.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Christopher & Banks Corporation
Date: April 9, 2008	By	:   /s/ Andrew Moller
		Andrew Moller
		Executive Vice President
		and Chief Financial Officer

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

CHRISTOPHER & BANKS CORPORATION

EXHIBIT INDEX TO FORM 8-K

Date of Report:	Commission File No.:
April 9, 2008	001-31390

CHRISTOPHER & BANKS CORPORATION

EXHIBIT NO.	ITEM
99.1	Press release dated April 9, 2008

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EX-99.1

Exhibit 99.1

2400 Xenium Lane North, Plymouth, MN 55441 · (763)551-5000 · Fax (763)551-5198 · www.christopherandbanks.com

FOR:	Christopher & Banks Corporation
COMPANY CONTACT:	Andrew Moller
	Executive Vice President and
	Chief Financial Officer
	(763) 551-5000
INVESTOR RELATIONS CONTACT:	Investor Relations:
	Joe Teklits/Jean Fontana
	ICR, Inc.
	(203) 682-8200

CHRISTOPHER & BANKS CORPORATION REPORTS

FISCAL 2008 FOURTH QUARTER AND FULL YEAR RESULTS

Provides First Quarter Fiscal 2009 Guidance

Minneapolis, MN, April 9, 2008 – Christopher & Banks Corporation (NYSE: CBK) today reported results for its fiscal 2008 fourth quarter and fiscal year ended March 1, 2008.

Fourth Quarter Highlights

·Total sales for the thirteen weeks ended March 1, 2008 were $125.3 million compared to $134.0 million for the fourteen-week period ended March 3, 2007.

·Same-store sales for the thirteen-week period ended March 1, 2008 as compared to the thirteen-week period ended March 3, 2007 declined 3.5%.

·Net loss on a GAAP basis was $8.3 million or $0.23 per diluted share. During the fourth quarter, the Company recorded non-cash, pre-tax, long-lived asset impairment charges of approximately $6.0 million and a goodwill impairment charge of approximately $3.6 million. These charges combined totaled $0.16 per diluted share, which assumes a normalized federal and state tax rate of 39.5%.

Fourth Quarter Results

Total sales for the thirteen weeks ended March 1, 2008 were $125.3 million compared to $134.0 million for the fourteen-week period ended March 3, 2007. Same-store sales for the

thirteen-week period ended March 1, 2008 are compared to the thirteen-week period ended March 3, 2007. On this basis, same-store sales declined 3.5%.

Merchandise buying and occupancy expense was $82.9 million or 66.1% of sales this fiscal quarter compared to $88.5 million or 66.1% of sales in last year’s fourth quarter. More than 300 basis points of improvement in merchandise margin was offset by deleveraging of occupancy expense and higher buying and distribution expense as a percent of sales. The deleveraging of occupancy expense was primarily due to the Company’s 3.5% decline in same-store sales and the extra week of sales in the fourth quarter of last fiscal year.

Fourth quarter selling, general and administrative (“SG&A”) expenses were $42.3 million, or 33.8% of sales this fiscal quarter, compared to $37.2 million or 27.8% of sales in the fourth quarter of last year. The higher SG&A rate as a percent of sales was primarily due to planned increases in marketing and IT consulting and other professional fees, the same-store sales decline of 3.5% and the resulting deleveraging of overall expenses, and the extra week of sales in the fourth quarter of last year.

The Company’s fourth quarter loss was $8.3 million or $0.23 per diluted share. During the fourth quarter, the Company recorded non-cash, pre-tax, long-lived asset impairment charges of approximately $6.0 million and a goodwill impairment charge of approximately $3.6 million. The impact of the total $9.6 million of non-cash, long-lived asset and goodwill impairment charges was $0.16 per diluted share, which assumes a normalized federal and state tax rate of 39.5%.

Lorna Nagler, President and Chief Executive Officer, commented, “While our fourth quarter results were disappointing, we were encouraged by the quality of our sales and we continued to make progress on many initiatives that will build a stronger platform for our Company and allow us to evolve and improve our internal operations and store processes. In the meantime, we are positioned to navigate through a challenging environment, with inventory per store down 22% at the end of the fourth quarter and merchandise receipt levels planned conservatively as we proceed through the first quarter of fiscal 2009.”

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Full Fiscal Year Results

Total sales for the fifty-two week fiscal 2008 period ended March 1, 2008 were $575.8 million compared to $547.3 million for the fifty-three week period ended March 3, 2007. Same-store sales increased 1% for the fifty-two week period ended March 1, 2008 compared to the corresponding fifty-two week period ended March 3, 2007.

For fiscal 2008, after taking into account long-lived asset impairment and goodwill impairment charges, net income was $17.0 million or $0.47 per diluted share, compared to $33.7 million or $0.89 per diluted share for fiscal 2007. As of March 1, 2008, the Company operated 837 stores compared to 778 stores as of March 3, 2007.

Cash and Cash-Equivalents and Long-Term Investments

The Company ended fiscal 2008 with total cash and cash-equivalents of $78.5 million. The Company had long-term investments of approximately $24.5 million, which consisted solely of investments in auction rate securities (“ARS”).  The ARS are classified as long-term investments, as the remaining maturity of the underlying securities for the ARS held by the Company ranges from 14 to 32 years.

ARS are variable-rate debt securities. ARS have a long-term maturity with the interest rate being reset through auctions that are typically held every seven, 28 or 35 days. All of the Company’s ARS are collateralized by student loans and currently have AAA (S&P) or Aaa (Moody’s) credit ratings. The repayment of the student loans for approximately 85% of the ARS, which serve as collateral for the ARS held by the Company, is substantially backed by the United States government. Until February 2008, the ARS market was liquid. However, in February 2008 a substantial number of auctions “failed”, meaning that there was not enough demand to sell the entire issue at auction.

Based on current market conditions, management believes that it is likely that auctions related to its ARS may continue to be unsuccessful at least for the near term. Unsuccessful auctions have limited the Company’s ability to access these funds. Management anticipates the liquidity of the ARS will continue to be restricted until there is a successful auction or until such time as another market for the ARS develops or until the ARS are called by the issuer.

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The Company continues to evaluate whether these ARS investments are appropriately valued at par and will complete its analysis prior to filing its Annual Report on Form 10-K for fiscal 2008, which the Company anticipates will be no later than May 15, 2008. If any of the Company’s ARS are deemed to be temporarily impaired, the valuation for that security will be reduced, and the reduction will not impact earnings, but be reflected in accumulated other comprehensive income, a component of shareholders’ equity.

The Company has a strong balance sheet and management believes that its cash and cash-equivalents are sufficient to meet the Company’s cash and liquidity needs for the reasonably foreseeable future.

Long-Lived Asset and Acorn Goodwill Review

Following the completion of the fourth quarter, the Company completed a review of its long-lived assets in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”). In addition, the Company reviewed its goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”). The Company recorded a pre-tax, non-cash charge of $6.0 million related to the impairment of store-level assets under SFAS No. 144. Of this amount, $5.6 million related to the Company’s Acorn division. In addition, the Company also determined that the full amount of its $3.6 million of goodwill related to Acorn was impaired under SFAS No. 142.

As previously acknowledged, Acorn’s overall results have not met the Company’s expectations. The Company is in the process of making adjustments to the Acorn merchandise mix and will continue its evaluation of all of the operations of its Acorn division.

Capital Expenditures

Fiscal 2008 capital expenditures were approximately $36 million. Of this amount, approximately $25 million was related to new stores, fixture replacements and store remodels. The majority of the remaining expenditures were related to various information technology initiatives. In fiscal 2009, management expects capital expenditures to be in the range of $22 to $24 million.

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E-commerce

E-commerce is an important area of potential future growth for Christopher & Banks. The Company launched separate e-commerce websites for its Christopher & Banks and C.J. Banks brands in February 2008. Initial customer response to merchandise offered on its e-commerce websites has exceeded the Company’s internal expectations and management expects to use this channel to drive incremental sales in fiscal 2009.

First Quarter Guidance

For the first quarter of fiscal 2009, the Company currently estimates that earnings per diluted share will range from $0.25 to $0.27. This compares to earnings per diluted share of $0.32 in fiscal 2008. This guidance assumes first quarter fiscal 2009 same-store sales will be roughly flat as compared to the first quarter of fiscal 2008.

Ms. Nagler concluded, “We are encouraged by our first quarter sales results through April 8, 2008, which included our second ever friends and family event. These events help us attract new customers and build loyalty with our existing customer base. In fiscal 2009, we plan to expand our marketing efforts, including increasing the number of carefully thought out, pre-planned promotions, in order to drive home our value proposition and increase awareness of our brands. We will also focus on completing various infrastructure investments while slowing store expansion to approximately 30 new stores in order to concentrate on positioning the Company for future growth when economic conditions become more favorable.”

Conference Call Information

The Company will discuss its fourth quarter and full year results in a conference call scheduled for today, April 9, 2008, at 5:00 p.m. Eastern time. The conference call will be simultaneously broadcast live over the Internet at http://www.christopherandbanks.com. An online archive of the broadcast will be available within one hour of the completion of the call and will be accessible at http://www.christopherandbanks.com until April 23, 2008. In addition, an audio replay of the call will be available shortly after its conclusion and will be archived until April 16, 2008. This call may be accessed by dialing (888) 203-1112 and using password 6743325.

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About Christopher & Banks

Christopher & Banks is a Minneapolis-based specialty retailer of women’s clothing. The Company currently operates 845 stores under the names Christopher & Banks, C.J. Banks and Acorn. The Company currently has 549 Christopher & Banks stores, 260 C.J. Banks stores and 36 Acorn stores.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may use the words “expect”, “anticipate”, “plan”, “intend”, “project”, “believe” and similar expressions and include the statements regarding (i) the Company’s first quarter inventory position; (ii) the value and the liquidity of its ARS and its ability to sell these securities without incurring a loss; (iii) the belief that its cash and other cash-equivalents are sufficient to meet its liquidity needs for the reasonable foreseeable future; (iv) management’s ability to improve the future performance of its Acorn division; (v) the anticipated amount of capital expenditures in fiscal 2009; (vi) the ability of the Company to gain incremental sales from its e-commerce websites; (vii) the Company’s anticipated first quarter earnings per diluted share; (viii) the Company’s ability to increase brand awareness and build customer loyalty through expanded marketing efforts, and (ix) the ability of its infrastructure investments to position the Company for future growth. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to: (i) the inherent difficulty in forecasting consumer buying and retail traffic patterns which may be affected by factors beyond our control, such as a weakness in overall consumer demand; adverse weather, economic or political conditions; and shifts in consumer tastes or spending habits that result in reduced sales; (ii) lack of acceptance of the Company’s fashions, including its seasonal fashions; (iii) the ability of the Company’s infrastructure and systems to adequately support our expanding operations; (iv) effectiveness of the Company’s brand awareness and marketing programs; (v) the possibility that, because of poor customer response to our merchandise, management may determine it is necessary to sell merchandise at lower than expected margins or at a loss; (vi) the failure to successfully implement the Company’s strategic plans, including plans with respect to the Acorn division; (vii) the risk that future auctions of the Company’s ARS will not succeed and the Company may have to take impairment charges relating to those securities or sell these securities at or below par value; or (viii) that issues related to the current housing market and uncertainty in the financial and credit markets will lead to reduced consumer spending on women’s apparel.

Readers are cautioned not to place undue reliance on these forward-looking statements

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which are based on current expectations and speak only as of the date of this release. The Company does not assume any obligation to update or revise any forward-looking statement at any time for any reason.

Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company’s periodic reports filed with the Securities and Exchange Commission and are available on the Company’s website under “Investor Relations” and you are urged to carefully consider all such factors.

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CHRISTOPHER & BANKS CORPORATION

UNAUDITED COMPARATIVE INCOME STATEMENT

FOR THE 13 AND 14 WEEKS AND 52 AND 53 WEEKS ENDED

MARCH 1, 2008 AND MARCH 3, 2007

(in thousands, except per share data)

	13 Weeks Ended			14 Weeks Ended		52 Weeks Ended		53 Weeks Ended
	March 1, 2008			March 3, 2007		March 1, 2008		March 3, 2007
Net sales	$	125,306		$	133,968	$	575,781	$	547,317
Costs and expenses:
Merchandise, buying and occupancy	82,855			88,497		354,468		330,473
Selling, general and administrative	42,320			37,243		166,362		145,229
Depreciation and amortization	6,128			5,410		22,603		20,546
Impairment of store assets	6,009			1,141		6,925		1,141
Impairment of goodwill	3,587			—		3,587		—
Total costs and expenses	140,899			132,291		553,945		497,389
Operating income (loss)	(15,593		)	1,677		21,836		49,928
Interest income	1,279			1,475		4,661		5,115
Income (loss) before income taxes	(14,314		)	3,152		26,497		55,043
Income tax provision (benefit)	(6,029		)	1,223		9,479		21,357
Net income (loss)	$	(8,285	)	$	1,929	$	17,018	$	33,686
Basic earnings per share:
Net income (loss)	$	(0.23	)	$	0.05	$	0.48	$	0.90
Basic shares outstanding	35,287			37,210		35,772		37,307
Diluted earnings per share:
Net income (loss)	$	(0.23	)	$	0.05	$	0.47	$	0.89
Diluted shares outstanding	35,287			37,345		35,852		37,761
Dividends per share	$	0.06		$	0.06	$	0.24	$	0.20

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CHRISTOPHER & BANKS CORPORATION

UNAUDITED COMPARATIVE BALANCE SHEET

(in thousands)

	March 1,			March 3,
	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	78,492		$	53,991
Short-term investments	—			48,275
Merchandise inventories	43,840			52,355
Other current assets	26,303			20,483
Total current assets	148,635			175,104
Property, equipment and improvements, net	133,599			127,776
Other assets:
Long-term Investments	24,550			—
Goodwill	—			3,587
Other	6,208			856
Total other assets	30,758			4,443
Total assets	$	312,992		$	307,323
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	15,381		$	16,288
Accrued liabilities	37,287			29,962
Total current liabilities	52,668			46,250
Other liabilities:
Deferred lease incentives	24,854			23,646
Other	15,443			11,662
Total other liabilities	40,297			35,308
Stockholders’ equity:
Common stock	450			450
Additional paid-in capital	110,360			106,807
Retained earnings	221,929			213,264
Common stock held in treasury	(112,712		)	(94,756		)
Total stockholders’ equity	220,027			225,765
Total liabilities and stockholders' equity	$	312,992		$	307,323

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