Chico's FAS, Inc. announced the company plans to close at least 250 U.S. retail stores over the next three years as part of a strategy to rebalance the mix between its physical store presence and its digital network.
The Fort Myers, Florida-based company’s brands include women’s clothing store Chico’s, intimates retailer Soma, and fashion boutique White House Black Market. Closings will be across the three brands.
The company said the timeframe will allow Chico’s FAs to take advantage of lease expirations and that closings will be weighted in the second and third years.
Chico’s FAS (NYSE:CHS) currently operates 1,431 stores in the U.S. and Canada and sells merchandise through 83 international franchise locations in Mexico.
The company said in a release that going forward, it will refocus on optimizing its integrated omni-channel customer experience platform, which includes a shared inventory system, a service that enables store associates to personalize the customer experience and a buy online, pick up in store option.
The company also has partnered with Amazon (NASDAQ:AMZN), ShopRunner and QVC (NYSE:QVCD).
"Our focus is on implementing those initiatives that drive the greatest levels of growth and profitability of our business,” said Shelley Broader, Chico’s FAS CEO and president. “This includes continued improvement in each of our differentiated brands, increased flexibility and efficiency across our organization, and fully leveraging the capabilities of our robust omni-channel platform to meet the ever-evolving needs of our customers and to enhance shareholder value."
The company reported third-quarter earnings of $6.5 million, or 5 cents a share, down 60 percent from $16.7 million the previous year, the Fort Myers News-Press reported.
But the company said fourth-quarter sales are trending better than predicted, and it anticipates a low double-digit decline in net sales rather than its previous expectation for a mid-teen decline. Chico’s FAS will release its fourth-quarter and fiscal year 2018 results in March.
The company said fourth-quarter comparable sales for Soma are trending well above expectations, White House Black Market’s performance is better than expected, and Chico's sales are trending in line with expectations.
In November 2018, the company announced Diane Ellis would step down as president of the Chico's brand after two years in the position. The company is actively seeking a new Chico’s president, and Broader is leading the brand in the interim.
