Christopher & Banks Corporation Reports February and Fiscal Fourth Quarter Sales Results

Business Wire, March 6, 2008

Lowers Guidance for the Fourth Quarter of Fiscal 2008

MINNEAPOLIS -- Christopher & Banks Corporation (NYSE: CBK) today reported February and fiscal fourth quarter sales results.

For the four-week period ended March 1, 2008 total sales were $29.5 million compared to $35.0 million for the five-week period ended March 3, 2007. February same-store sales for the four weeks ended March 1, 2008 are compared to the four-week period ended March 3, 2007. On this basis, same-store sales for the four-week period ended March 1, 2008 declined 5%.

Total sales for the fourth quarter ended March 1, 2008, which included 13 weeks, were $125.2 million compared to $134.0 million for the quarter ended March 3, 2007, which was a 14 week period. Same-store sales for the fourth quarter of fiscal 2008 declined approximately 3.5% compared to the same 13 week period last year.

Total sales for the 52 week period ended March 1, 2008 were $575.7 million compared to $547.3 million for the 53 week period ended March 3, 2007. Same-store sales increased 1% for the fiscal year ended March 1, 2008 compared to the same 52 week period last year. As of March 1, 2008, the Company operated 837 stores compared to 778 stores as of March 3, 2007.

The Company also announced that it launched separate e-commerce websites for its Christopher & Banks and C.J. Banks brands in February 2008.

Lorna Nagler, President and Chief Executive Officer, commented, "February results were disappointing as customer traffic continued to be light. Our inventories have been conservatively managed and we believe we are well positioned to begin our new fiscal year. We are pleased to have launched our Christopher & Banks and C.J. Banks e-commerce websites in February and look forward to using this channel to gain incremental sales."

Auction Rate Securities

Auction rate securities ("ARS") are long-term debt instruments with interest rates that reset through periodic short-term auctions which occur every 7, 28 or 35 days. If there are insufficient buyers, then the auction "fails" and holders are unable to liquidate their investment through the auction. A failed auction is not a default of the debt instrument, but does set a new, generally higher interest rate in accordance with the original terms of the debt instrument. The result of a failed auction is that the ARS continues to pay interest in accordance with its terms; however, liquidity for holders is limited until there is a successful auction, until such time as another market for ARS develops or until the ARS are called by the issuer. Auctions continue to be held as scheduled until the ARS matures or until it is called.

As of March 1, 2008, the Company held approximately $24.6 million in principal amount of ARS which have AAA (S&P) or Aaa (Moody's) credit ratings, the highest credit ratings provided by these organizations. The ARS represented approximately 25% of the Company's cash, cash equivalents, and short-term and long-term investments at March 1, 2008. The stated maturity of the underlying securities for the ARS held by the Company ranges from 20 to 35 years. All of the Company's ARS are collateralized by student loans and the repayment of such loans is substantially backed by the United States government.

Beginning February 13, 2008 through March 5, 2008, the Company has experienced failed auctions for 16 ARS issues, representing approximately $20.1 million in principal amount. Management believes the Company has the ability to hold these securities on a long-term basis due to the fact that other liquid cash and cash equivalents are considered sufficient to meet the reasonably foreseeable future cash needs of the Company. The Company will continue to monitor circumstances related to the ARS to determine if any temporary or permanent impairment is indicated.

Financial Outlook

In light of the current retail environment, the Company is evaluating whether there are non-cash impairments of long-lived assets or goodwill that primarily relate to its Acorn division. The Company's Acorn division currently has a total of approximately $10.5 million of long-lived assets and goodwill. While the long-lived asset and goodwill impairment evaluation will be completed in connection with the finalization of year-end results, the Company expects that non-cash impairment charges will be incurred. Although Acorn results have not met the Company's expectations, management is in the process of making adjustments to the Acorn merchandise mix and implementing other operational changes in an effort to improve Acorn's future performance.

Prior to any non-cash impairment charges from the evaluation of Acorn assets or potential impacts from the ARS, the Company currently estimates that its fourth quarter results will likely reflect a loss at or slightly below the low end of its previously provided guidance of a loss of ($0.05) to ($0.07) per diluted share.

Fourth Quarter and Fiscal 2008 Results Reporting Date

The Company plans to report fiscal 2008 fourth quarter and full year results after the market closes on Wednesday, April 9, 2008.