Deep Value With Women's Apparel: Christopher & Banks Corp

Christopher and Banks Corp is a retailer that specializes in women's apparel and accessories. Founded in 1956, it operates 472 stores in 45 states. This includes 321 Missy, Petite, Women ("MPW") stores, 79 outlet stores, 37 Christopher and Banks ("CB") stores, and 35 C.J. Banks ("CJ") stores. Their online and retail stores allow customers to browse, buy, return or exchange their privately branded goods.

Changes Not Fully Realized In Current Price

Activist investor, Macellum Capital Management continues to push and realize important change starting in 2016. In fact, Macellum reached a settlement to install Macellum's CEO Duskin and three new directors to the seven-person CBK board. Macellum slow ownership acquisition from 5% in 2016 to the most recent 13D filed on 02/2017 for 4,189,957 shares or 11.10% of shares outstanding. Further, they added more shares after the most recent 13D with open market purchases by Macellum CEO and CBK board member Jonathan Duskin. He added 232,500 shares to bring the total Macellum ownership at 4,422,457.

Joel Waller former CEO is now the Interim President and Chief Executive Officer.  Additionally, he serves on the board and is an investor in Macellum Retail Opportunity Fund. Mr. Waller has 35 years of retail experience and is 77. So clearly Macellum controls the company's future and is incentivized to maximize shareholder value. Note that Macellum initial 5% 13D filing in 2016 was with shares purchased over $5 versus today price of $1.21.

Strong mean reverting attributes. As of January 2014, the enterprise value was 211.12M. Today its 28.30M down 87% from 01/2014. But, the company has a strong balance sheet, Z score of 3.11, cash per share of .47, book value per share of 1.56, current ratio = 1.47. CBK is oversold down 87% from January 2014 and is a strong unique candidate for a higher valuation.

Monetization of the corporate building (sale-leaseback) with an estimated value in the low to mid-teen million range. This compares favorably to the current enterprise value of 27.60M.

CBK trades below its replacement value. Stores trade for around 58.47K based on the current enterprise value of 27.60M with 472 stores. This valuation excludes the sale (leaseback real estate deal) of the corporate building of ~14M and 51.40M in current inventory and 50.374M in net store improvements, computers, and websites.Further, their target is a more retail loyal demographic, adult women. Brand loyalty created from word of mouth and decades serving exclusively the adult women demographic. These tangible and brand attributes are not easily duplicated.

Aggressive 2017 insider buying no selling

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Long: CBK

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