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When Chico's FAS announced it had sold its Boston Proper brand on Jan. 19, investors shrugged.
Chico's publicly held stock showed little movement from its $10-a-share price on the New York Stock Exchange on news of the sale of Boston Proper to a private equity firm, most likely because Chico's investors had already priced it in long ago.
Fact is, Boston Proper has been a drag on Chico's for a long time. The first signs of trouble appeared in November 2013 when Fort Myers-based Chico's took a $72.5 million noncash charge for goodwill and trade-name impairments on Boston Proper, the brand it had acquired just two years earlier for $213 million.
Then, in the fourth quarter of 2014, Chico's took another $30.1 million in goodwill and trade-name impairments on Boston Proper. At the time, Chico's had started to transform Boston Proper from a catalog brand by building stores in malls, including the flagship shop at Coconut Point Mall in Fort Myers.
Most recently, in August, Chico's told investors it was taking $66.9 million more in goodwill and trade-name impairments related to Boston Proper and another $16.2 million to shut the 20 Boston Proper stores it had opened. (It added another $3.1 million in lease termination charges related to the Boston Proper stores in the third quarter.)
In all, Chico's took more than $188 million in impairment and restructuring charges related to Boston Proper, according to earnings statements. Terms of the deal to sell Boston Proper to Los Angeles-based private-equity firm Brentwood Associates remain undisclosed.
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