April 1 (Reuters) - Charming Shoppes Inc (CHRS.O), a retailer of women's plus-size apparel, said it expects to save $125 million in fiscal 2010 and plans to continue reducing inventories during the period.

Lane Bryant Spring 2009 at Charming Shoppes

In a regulatory filing, the company, which announced in January that it plans to slash about 225 jobs, said substantial reductions in operating expenses and strong inventory management would allow it to generate positive free cash flow.

Charming Shoppes said it lowered its fiscal 2009 inventory levels by 19 percent.

The company said it would generate positive cash flow in the year ending Jan. 30, 2010, if same-store sales continued to decline in the low-double-digit range and be cash flow neutral if comparable-store sales fell in mid-double digits.

Shares of the company, whose brands include Lane Bryant, Fashion Bug and Catherines, were up almost 4 percent at $1.45 Wednesday morning on Nasdaq. (Reporting by Amitha Rajan in Bangalore; Editing by Himani Sarkar)