Here at The Motley Fool, we believe individual investors should have the same access to information that Wall Street has. In that spirit, we've listened in on some investment bank conferences with major companies and are giving you the rundown. We call this feature "Fool on the Street."

Knowing your niche
Retail is a demanding business, littered with corpses of companies that fail to stand the test of time. Occasionally you see successful retailers that become complacent and stale, like the KMART division of Sears Holdings (NASDAQ:SHLD). More often the problem is a company that doesn't clearly define its niche, but then works to be world class at servicing that niche.

Which retailers are best at knowing their niche? Currently, you could argue that Target (NYSE:TGT) is winning at being an upscale mass merchant, Costco (NASDAQ:COST) is dominating value and the treasure hunt, and Kohl's (NYSE:KSS) is the king of fashionable private label. Contrast this with Limited (NYSE:LTD) throwing in the towel on a portfolio approach to retail, refocusing back on intimate apparel and personal care.

Christopher & Banks (NYSE:CBK) recently opened the kimono on its strategy at the CIBC World Growth Conference. Foolish investors may be interested to learn more about this company, which is clearly focused on a large but distinct market segment in apparel retailing.

A brand for every boomer
CBK is all about female baby boomers, with three retail brands designed to capture segments of this large and affluent market. The Christopher & Banks brand is the flagship, positioned as a "missy moderate" concept. The target customer is 50 years old, with an average household income of $82,000. She works outside the home, comes in sizes between 4 and 16, and is looking for casual clothing that suits both work and lifestyle needs.

Next comes the C.J. Banks brand, designed for the same customer, except she is a "plus" size. The DNA of this brand is very similar to the flagship, but has some unique differences that were learned during intense focus group discussions. Aisleways are noticeably larger, as are dressing rooms. The merchandise is a little less upscale, but still focused on classic, casual styles. The company learned that plus size customers do not want to shop with their "missy" counterparts, they want their own store. C.J. Banks is designed to suit her needs.

The final CBK brand is Acorn, acquired in 2004. Acorn is a lifestyle-driven concept for more affluent boomers, with household income between $80,000 and $100,000. The stores are about 1,000 square feet smaller, and designed to look like a boutique. They don't feature large quantities of any one type of product, fostering a "discovery" type of shopping environment.

Growth potential
Christopher & Banks currently operates 803 stores in 46 states. By format, the counts are 528 Christopher and Banks, 237 C.J. Banks, and 38 Acorn stores. The company sees the potential to expand to 1,300 stores in the U.S., with the greatest potential in the plus-size format. This year CBK will open about 70 stores: 40 C.J. Banks, 25 Christopher and Banks, and 5 Acorns. Traditionally the company has closed about 5 underperforming stores per year. At 65 net new stores per year, the ultimate build-out represents about 7-8 more years of rapid store growth in these three brands.

Marketing opportunities
Historically, Christopher & Banks has not spent any dollars on marketing -- quite surprising for a company in this business, but a testament to the strength of the core business model. Now the company is spending 1% of sales on marketing, still not much, but it's a start.

The initial focus is CRM (customer relationship management). Last fall, the company began to capture customer information; name, address, email, etc. The database has grown to 3.5 million, and the company is beginning to communicate via email and snail mail with these customers. Efforts have been exploratory to date, but will intensify this fall.

As I mentioned a few weeks ago, Christopher & Banks has also decided to upgrade their website through an engagement with Accretive Commerce, who will handle customer care, fulfillment, and distribution. The site will initially be focused on extending the CRM efforts, and won't get heavily into direct product sales.

Infrastructure
Christopher & Banks is well behind the curve in many infrastructure areas, which it is working aggressively to shore up. First on the list are merchandise planning & allocation systems from Oracle and JDA, which will give the company enhanced assortment planning capabilities, and replenishment through size and store clustering.

At the same time, the company is upgrading data gathering and analytic tools to get more timely access to in-store activity like traffic counts, sales, inventory, and markdowns. While it is easy to wonder how a modern retailer can function without these tools, it is also encouraging to realize that Christopher & Banks has a lot of opportunity for improvement in these areas, which should improve inventory management and margins.

Expectations for the fall season
I've noted recently that comparable-store sales turned negative beginning last fall, and that first-quarter inventory levels were running heavy. During the presentation, the company admitted receipts for the spring season were too aggressive, making it critical to liquidate "heavy inventory levels" during what remains of the summer.

It was encouraging to see positive sales results in June, which will help clear the inventory, although we should not expect robust profit performance during the second quarter, thanks to heavy markdowns. The company indicated that receipt levels have been conservatively planned for the back half of the year. That, combined with better assortment planning tools, could make for an improvement during the all-important fall season.

I don't expect Christopher & Banks to achieve its earnings guidance for 2007, as too much of the year is already over. But I like the company's crisp focus on understanding and serving a well-defined market niche. Not a lot of other apparel retailers are squarely targeted on the baby boomer generation and have the multiple brands to take advantage of this demographic. For those of you who are interested in apparel retailing, results in 2008 could show marked improvement.

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Motley Fool contributor Timothy M. Otte surveys the retail scene from Dallas. He welcomes comments on his articles, but doesn't own shares in any of the companies mentioned in this article. Costco is a Motley Fool Stock Advisor recommendation. The Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.