SC 13D/A

0001193125-15-226541.txt : 20150618 0001193125-15-226541.hdr.sgml : 20150618 20150618070029 ACCESSION NUMBER: 0001193125-15-226541 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20150618 DATE AS OF CHANGE: 20150618 GROUP MEMBERS: JONATHAN DUSKIN GROUP MEMBERS: MACELLUM ADVISORS GP, LLC GROUP MEMBERS: MACELLUM CAPITAL MANAGEMENT, LLC GROUP MEMBERS: MACELLUM MANAGEMENT, LP GROUP MEMBERS: MCM MANAGEMENT, LLC GROUP MEMBERS: MCM MANAGERS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHRISTOPHER & BANKS CORP CENTRAL INDEX KEY: 0000883943 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 061195422 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-43828 FILM NUMBER: 15939158 BUSINESS ADDRESS: STREET 1: 2400 XENIUM LANE NORTH CITY: PLYMOUTH STATE: MN ZIP: 55441-3626 BUSINESS PHONE: 7635515000 MAIL ADDRESS: STREET 1: 2400 XENIUM LN NORTH CITY: PLYMOUTH STATE: MN ZIP: 55441-3626 FORMER COMPANY: FORMER CONFORMED NAME: BRAUNS FASHIONS CORP DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Macellum Retail Opportunity Fund, LP CENTRAL INDEX KEY: 0001607223 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 512 SEVENTH AVENUE STREET 2: 40TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212.956.3008 MAIL ADDRESS: STREET 1: 512 SEVENTH AVENUE STREET 2: 40TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 FORMER COMPANY: FORMER CONFORMED NAME: Macellum SPV I, LP DATE OF NAME CHANGE: 20140505 SC 13D/A 1 d944068dsc13da.htm SC 13D/A SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Christopher & Banks Corporation

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

171046105

(CUSIP number)

Jonathan Duskin

c/o Macellum Capital Management, LLC

99 Hudson Street, 5th Floor

New York, New York 10013

(212) 956-3008

Jeffrey L. Kochian

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

New York, New York 10036

(212) 872-8069

(Name, address and telephone number of person authorized to receive notices and communications)

June 18, 2015

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS Macellum Retail Opportunity Fund, LP
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* WC
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 1,880,006
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 1,880,006
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,880,006
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% (1)
14.	TYPE OF REPORTING PERSON* PN

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS Macellum Capital Management, LLC
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* WC
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 32,582
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 32,582
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 32,582
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% (1)
14.	TYPE OF REPORTING PERSON* OO

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS Macellum Advisors GP, LLC
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 1,880,006
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 1,880,006
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,880,006
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% (1)
14.	TYPE OF REPORTING PERSON* OO

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS Macellum Management, LP
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 1,880,006
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 1,880,006
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,880,006
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% (1)
14.	TYPE OF REPORTING PERSON* PN

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS MCM Managers, LLC
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 32,582
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 32,582
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 32,582
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% (1)
14.	TYPE OF REPORTING PERSON* OO

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS MCM Management, LLC
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 32,582
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 32,582
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 32,582
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) Less than 1% (1)
14.	TYPE OF REPORTING PERSON* OO

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

CUSIP No. 171046105


1.	NAMES OF REPORTING PERSONS Jonathan Duskin
2.	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) ¨ (b) ¨
3.	SEC USE ONLY
4.	SOURCE OF FUNDS* OO
5.	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) ¨
6.	CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7.	SOLE VOTING POWER: 1,912,588
		8.	SHARED VOTING POWER: 0
		9.	SOLE DISPOSITIVE POWER: 1,912,588
		10.	SHARED DISPOSITIVE POWER: 0
11.	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,912,588
12.	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* ¨
13.	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% (1)
14.	TYPE OF REPORTING PERSON* IN

(1)	Based on 37,204,662 shares of common stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

Amendment No. 2 to Schedule 13D

This Amendment No. 2 amends and supplements the Schedule 13D (the “Schedule 13D”) filed on behalf of Macellum Retail Opportunity Fund, LP (“Opportunity Fund”), Macellum Capital Management, LLC (“Macellum Capital Management”), Macellum Advisors GP, LLC (“Macellum GP”), Macellum Management, LP (“Macellum Management”), MCM Managers, LLC (“MCM Managers”), MCM Management, LLC (“MCM Management”) and Jonathan Duskin (“Mr. Duskin”, and together with Opportunity Fund, Macellum Capital Management, Macellum GP, Macellum Management, MCM Managers and MCM Management, the “Reporting Persons”) with the Securities and Exchange Commission (the “SEC”) on April 1, 2015, as amended by Amendment No. 1 on May 19, 2015.

Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable. All capitalized terms contained herein but not otherwise defined shall have the meanings ascribed to such terms in the Schedule 13D.

ITEM 4.

Purpose of Transaction.

Item 4 of this Schedule 13D is supplemented and superseded, as the case may be, as follows:

On June 18, 2015, Macellum GP sent a letter (the “Board Letter”) to the Board of Directors of the Issuer (the “Board”) stating its belief that the Board has failed to exercise appropriate oversight and has not served as a good sounding board for CEO LuAnn Via. Macellum GP further notes that it is disappointed to have had its request to add highly qualified directors to the Board, including former CEO Joel Waller, summarily rejected. As a result of the Issuer’s disappointing first quarter results and the Issuer’s rejection of Macellum GP’s proposal to appoint such highly qualified directors to the Board, Macellum GP intends to vote against each member of the Board at the Issuer’s upcoming annual meeting of stockholders. In the Board Letter, Macellum GP states that issues it raised earlier this year are negatively impacting the business, and the Issuer can no longer blame the west coast port strike for its declining results and the Issuer must look internally for solutions. Macellum GP highlights its additional concerns over the deterioration in the Issuer’s results and believes that with proper governance and oversight, the Issuer should be capable of achieving high single digit operating margins and meaningful revenue growth by gaining back lost market share within its target demographic. Lastly, Macellum GP states its belief that with the trend toward consolidation in the missy sector, highlighted by Ascena Retail Group, Inc. agreeing to purchase ANN INC., the Issuer would be an attractive target and should formally begin a process to explore a strategic alternative.

The foregoing description of the Board Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Board Letter, which is filed as Exhibit 99.4 and is incorporated herein by reference.

ITEM 5.

Interest in Securities of the Issuer.

Item 5 of this Schedule 13D is hereby amended and restated in its entirety as follows:

(a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D are incorporated herein by reference. Such information is based on 37,204,662 shares of Common Stock outstanding as of May 29, 2015, as disclosed in the Issuer’s Form 10-Q filed with the SEC on June 11, 2015.

(c) Except as set forth in our previously filed amendment to Schedule 13D, there have been no other transactions in the class of securities reported on that were effected within the past 60 days.

(d) The disclosure regarding the relationship between the Reporting Persons in Item 2(c) of this Schedule 13D is incorporated by reference herein.

(e)	Not applicable.

Item 7.

Material to Be Filed as Exhibits.


Exhibit		Description

99.4		Letter to the Board of Directors of Christopher & Banks Corporation, dated June 18, 2015

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

June 18, 2015


MACELLUM RETAIL OPPORTUNITY FUND, LP

By:		Macellum Advisors GP, LLC,
		its general partner

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Sole Member

MACELLUM CAPITAL MANAGEMENT, LLC

By:		MCM Managers, LLC,
		its managing member

By:		MCM Management, LLC,
		its managing member

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Managing Member

MACELLUM ADVISORS GP, LLC

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Sole Member

MACELLUM MANAGEMENT, LP

By:		Macellum Advisors GP, LLC,
		its general partner

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Sole Member


MCM MANAGERS, LLC

By:		MCM Management, LLC,
		its managing member

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Managing Member

MCM MANAGEMENT, LLC

By:		/s/ Jonathan Duskin
Name:		Jonathan Duskin
Title:		Managing Member

/s/ Jonathan Duskin
JONATHAN DUSKIN

EX-99.4 2 d944068dex994.htm EX-99.4 EX-99.4

Exhibit 99.4

LOGO

June 18, 2015

The Board of Directors

Christopher & Banks Corporation

2400 Xenium Lane North

Plymouth, Minnesota, 55441

Dear Directors,

As you are aware, Macellum Advisors GP, LLC and its affiliated funds (“we” or “Macellum”) own approximately 5.1% of the outstanding shares of Christopher & Banks Corporation (the “Company”). We and our partners have substantial experience investing in consumer and retail companies and helping companies improve their long-term financial and share price performance. Macellum’s historical investments include The Children’s Place, Collective Brands, GIII Apparel Group, Hot Topic, Charming Shoppes and Warnaco.

We are writing to express our extreme disappointment with the first quarter results and yet another reduction of guidance. We had hoped that the Company’s recently lowered expectations would be sufficient to account for any lingering weakness related to the West Coast port strike. Unfortunately, that was not the case. Instead many of the concerns we raised in our April 1^st letter (and reasons why we sought Board representation at that time) are being confirmed.

After the Company rejected our initial requests to fortify the Board in March of this year, we determined to let Management attempt to execute their existing plan based in large part on their strong conviction that the Company’s problems were under control. With the first quarter disappointment squarely in focus, along with other reasons set forth below, we are convinced that the Company is in need of additional oversite. Over the past two weeks, we have had several discussions with Management and the Company’s Chairman, and we have offered the assistance of several well-qualified potential directors, including the former CEO, Mr. Joel Waller, who we believe could be helpful in getting the Company on the right track. Again, we were summarily dismissed. Unfortunately, given the Board’s decision to reject our proposal, the only tool we possess as means to effect change at the upcoming annual meeting is withholding our votes for the existing Board. As a result, we will be voting AGAINST each Director at the Company’s upcoming annual meeting.

99 Hudson Street • 5^th Floor • New York, NY 10013

I.	Poor results and missed execution

We believe the MPW conversions are a good strategy for the Company, but the execution is not living up to the potential. Specifically, the Company has failed to deliver the targeted productivity and profitability gains. We remain convinced that the goals can be realized but not without more disciplined execution.

We are equally concerned that customers are not responding to the Company’s merchandise. The approximately 60% of stores in the Company’s same store sales base had the worst same store sales results of any specialty apparel retailer in the sector.¹ The Company’s revised guidance would suggest a similar outcome for the second quarter. As we feared, these results can no longer be blamed on external variables like the West Coast port strike and the Company must look inward for solutions. It appears to us that many of the changes made to the merchandise strategy are failing to resonate with customers, who are voicing their negative reaction through decreased purchases.

With sales down (11)% in Q1 and inventories up 1%, the Company’s inventory turns are slowing. In fact, since the end of 2012 sales have diminished by (16)% while inventories are up 18%. In the first quarter of April 2013 the Company began with $42mm of inventory. During the quarter they were able to generate $108mm in sales, a 24% same store sales gain and $1mm of EBIT. This year the Company began the quarter with $45mm of inventory and during the quarter generated sales of $91.6mm, a same store sales decline of (11)% and a $(2.5)mm EBIT loss. Unlike Management’s characterization that inventory levels was one of the primary culprits for the deteriorating results these facts suggest to us that some other changes within the merchandise strategy must be driving this negative customer response.

The Company’s outlook is troubling as well. With the port strike behind us we don’t understand how guidance could be so weak. The Company’s peer group and a broader peer group of missy and specialty apparel retailers all guided to much stronger trends than the Company’s implied same store sales guidance of a decline of mid to high single digits.²

II.

Issues in planning and allocation

While we believe changes to the merchandise strategy to be the primary driver for deteriorating sales results, the failure to effectively execute in planning and allocation was also an issue. We also believe the planning and allocation function is one of the most critical at any specialty retailer. In our recent meetings with the Company, we struggled to understand the magnitude of the sales decline. One of the reasons offered was poor execution in planning and allocation. According to CEO LuAnn Via, the lead role within planning and allocation was separated into two. As a result of a lack of communication and poor systems, an error was made whereby high volume stores did not receive enough inventory and low volume stores received too much. This resulted in high volume stores, such as the Internet (considered the Company’s largest “store”), having material out-of-stocks. The converse, however, did not prove to be true, low volume stores, with additional inventory did not experience meaningful sales increases. Again,

99 Hudson Street • 5^th Floor • New York, NY 10013

to our minds a more likely explanation is that the merchandise is not resonating with customers. As for laying the blame with systems we do not doubt that better systems could help and that the MPW conversions have complicated matters. However, we would point out that these same systems were in place while the Company generated sales trends were at least as good as the sector and in some periods much higher than industry averages prior to Q3 of last year. To us, this is just one more example of the Board that is not asking the right questions of their executives. Simply put, if Christopher & Banks’ largest “store”, the internet, was planned to grow “X”% then it needed “X”% more inventory to achieve those results. No complex systems are required to determine this, just proper oversight and common sense.

III.

Material insider sales in the face of significantly lowered expectation

We remain troubled by the timing and magnitude of the insider sales, and believe they are too coincidental with major negative earnings revisions not to require further investigation. This type of behavior, if validated, could constitute a significant breach of fiduciary responsibility and might indicate that many on the Board are more concerned with their own self-interest than properly discharging their fiduciary obligations. The optics of these sales should be troubling to all stockholders and we feel it is reasonable to ask for an explanation.

IV.

Stockholder misperception

Over the last few months we have encountered a misperception that we would like to clarify. Many investors have suggested to us that Ms. Via had historically or was currently seeking and receiving input from Mr. Waller. This is not accurate. In fact, Ms. Via would not allow Mr. Waller to attend a meeting we had with the Company in April. Ms. Via has never, at any point since being appointed CEO, sought counsel from Mr. Waller. We are only left guessing as to why Ms. Via wouldn’t seek input from Mr. Waller. After meeting with Ms. Via last week she once again reiterated that she was opposed to Mr. Waller joining the board or his involvement in any other form. In response, we suggested that we would be willing to put forth other candidates with similar skills and abilities that would be equally helpful to the Company. Again, we were rebuffed.

V.	Exploration of a sale

While we hope results can improve, we feel it is critical that the Company formally explore strategic options. The Board cannot sit by idly and hope the Management team will get it right this time. The Company must explore a sale now, as better execution in the future is not guaranteed. With the recent acquisition of Ann Inc. by Ascena Retail Group Inc., it is clear that there is a trend toward consolidation in the missy sector of retail. We believe Christopher & Banks is an attractive acquisition target for many strategic and financial buyers. The opportunities presented by the MPW conversions, margin recovery and synergies should be significant.

99 Hudson Street • 5^th Floor • New York, NY 10013

VI.

The time for change at the Board is now

We remain mystified as to why, at this juncture after multiple quarters of declining results and lowered targets, Ms. Via and the Board would be opposed adding new highly qualified board members. Ms. Via refusal to even talk to Mr. Waller is particularly troubling given his significant success during his tenure at the Company.

Earlier in the year we surfaced many of the issues and challenges faced by the Company. Unfortunately, our concerns have been borne out as the results have shown the business suffered beyond the impact of the port strike. The Board, who should have substantially greater access to information, has seemingly failed to see these obvious problems. If we had joined the Board back in March, we could be several months into the implementation of possible solutions but instead are now faced with lower projections and forced to wait several more quarters to see if the issues are being adequately addressed.

Unfortunately, we believe the operating results and stock price performance speak for themselves. The Company is failing to deliver compelling products to their customers and failing to execute the MPW conversions to plan.

These facts all suggest to us that the Board is not providing enough support to help the Company achieve its objectives. Effective Boards are comprised of industry experts that serve as effective sounding boards for their executives. It is not enough for a Board to create a compensation plan that satisfies the “say on pay” requirements and watch idly as the business deteriorates. By the time business deterioration is apparent in metrics like same store sales, operating margins or inventory turns, the damage has already been done. An effective Board must establish measurable mileage markers to ensure the executives remain focused on the right issues and are progressing against their targets and benchmarks. We feel that with additional oversite and input from Board members with deep industry knowledge and expertise, the Company could be executing at a much higher level.

There is nothing preventing the Board from adding Directors at this juncture. We remain open to having a constructive dialog with Management and the Board and believe we can work together to help Christopher & Banks achieve its full potential.

Sincerely,

/s/ Jonathan Duskin

Jonathan Duskin

Macellum Advisors GP, LLC

99 Hudson Street • 5^th Floor • New York, NY 10013

Appendix

Footnote 1:


	One Year												Two Year Stacked
	2Q14			3Q14			4Q14			1Q15			2Q14			3Q14			4Q14			1Q15
CBK Sales Per Square Foot		11.4	%		(3.0	%)		(4.0	%)		(11.6	%)		21.0	%		4.9	%		(7.3	%)		(8.6	%)
CBK Same-Store Sales		2.6	%		(7.6	%)		(7.5	%)		(11.7	%)		10.3	%		(2.7	%)		(8.9	%)		(11.9	%)

Same-Store Sales	2Q14			3Q14			4Q14			1Q15			2Q14			3Q14			4Q14			1Q15
BEBE		(1.9	%)		0.7	%		8.0	%		1.2	%		(9.8	%)		(2.3	%)		5.4	%		(4.5	%)
BKE		(0.4	%)		(0.0	%)		2.2	%		(1.2	%)		3.2	%		0.3	%		(0.6	%)		(1.9	%)
CATO		3.0	%		4.0	%		8.0	%		(3.0	%)		1.0	%		3.0	%		5.0	%		0.0	%
CTRN		5.3	%		6.7	%		13.9	%		1.8	%		7.0	%		4.3	%		10.4	%		6.0	%
DEST		(5.1	%)		(4.8	%)		(2.7	%)		(1.1	%)		0.2	%		(3.6	%)		(3.4	%)		(5.1	%)
DXLG		7.0	%		5.5	%		8.9	%		5.5	%		10.8	%		9.9	%		13.1	%		8.9	%
FRAN		(7.0	%)		(6.0	%)		(1.0	%)		(2.0	%)		(8.0	%)		(9.0	%)		(7.0	%)		(9.0	%)
NWY		2.3	%		(3.4	%)		(0.9	%)		1.8	%		4.4	%		(0.4	%)		0.3	%		(0.4	%)
ZUMZ		3.4	%		3.7	%		8.0	%		3.0	%		4.3	%		5.2	%		5.8	%		4.8	%
SCVL		(2.1	%)		2.3	%		9.5	%		3.0	%		0.5	%		3.0	%		7.0	%		1.3	%
TLYS		(7.1	%)		(1.2	%)		2.9	%		2.0	%		(7.6	%)		(3.6	%)		(2.0	%)		(4.8	%)
VRA		(5.3	%)		0.9	%		(14.4	%)		(16.9	%)		(6.9	%)		(4.1	%)		(20.9	%)		(26.3	%)
LULU		0.0	%		3.0	%		8.0	%		6.0	%		13.2	%		13.7	%		12.0	%		7.0	%
CHS		0.3	%		(1.6	%)		4.3	%		(0.1	%)		(2.3	%)		(3.0	%)		0.9	%		(2.7	%)
ANN		(2.1	%)		(4.3	%)		1.0	%		(1.5	%)		0.7	%		(0.6	%)		3.9	%		(3.3	%)
Ann		(0.7	%)		(6.6	%)		(0.4	%)		(3.0	%)		2.4	%		(6.0	%)		(1.5	%)		(5.3	%)
Loft		(2.9	%)		(2.9	%)		1.9	%		(0.6	%)		(0.4	%)		2.7	%		7.6	%		(2.2	%)
EXPR		(5.0	%)		(5.0	%)		(2.0	%)		7.0	%		1.0	%		0.0	%		(1.0	%)		(4.0	%)
ASNA		(2.0	%)		(2.0	%)		1.0	%		(1.0	%)		2.0	%		2.0	%		1.0	%		(2.0	%)
DressBarn		0.0	%		0.0	%		2.0	%		(4.0	%)		(2.0	%)		1.0	%		2.0	%		(8.0	%)

AVERAGE		(0.9	%)		(0.1	%)		3.1	%		0.0	%		0.7	%		0.9	%		1.8	%		(2.4	%)
Proxy Peers		(0.7	%)		0.7	%		3.5	%		(0.5	%)		(0.1	%)		0.2	%		1.1	%		(2.6	%)

Source: Bloomberg L.P., Company filings and Macellum Estimates. Proxy peers include: BEBE, BKE, CATO, CTRN, DEST, DXLG, FRAN, NWY, ZUMZ, SCVL, TLYS, and VRA.

99 Hudson Street • 5^th Floor • New York, NY 10013

Footnote 2:


2Q15 Same-Store Sales Consensus Estimates
BEBE	4.0	%
BKE	0.3	%
CATO	(1.0	%)
CTRN	5.0	%
DEST	NA
DXLG	5.5	%
FRAN	(3.8	%)
NWY	2.5	%
ZUMZ	(3.5	%)
SCVL	1.0	%
TLYS	0.0	%
VRA	(17.0	%)
LULU	7.1	%
CHS	(0.4	%)
ANN	0.8	%
Ann
Loft
EXPR	2.5	%
ASNA	(0.1	%)
DressBarn

AVERAGE	0.2	%
Proxy Peers	(0.6	%)

Source: Bloomberg L.P. Proxy peers include: BEBE, BKE, CATO, CTRN, DEST, DXLG, FRAN, NWY, ZUMZ, SCVL, TLYS, and VRA.

99 Hudson Street • 5^th Floor • New York, NY 10013

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