Loading
FORT MYERS — Chico's FAS, in a letter to investors posted today, accused shareholder Barington Capital Group of misleading investors about the scope of cuts at the women's retailer.
Under the newly appointed CEO Shelley Broader, Chico's has announced cuts of as much as $85 million. “While we expect to announce further cost reductions, Barington's suggested cuts ignore reductions that have already been accomplished and risk harming the very brand differentiators that have supported our success,” according to a Chico's letter to shareholders dated June 16.
Barington, which controls 1.5% of Chico's stock, has proposed two candidates for election to Chico's board at the annual meeting next month, arguing that the company's recent cost-cutting measures have been insufficient. The stock is down more than 30% over the past 12 months and has fallen about 78% from its high of $48.90 in February 2006, according to a statement from Barington on June 14.
“Already, Ms. Broader has announced initiatives that are estimated to reduce costs by between $65 million and $85 million annually,” the Chico's letter to shareholders reads. “The company's cost review is ongoing, and we expect to identify additional opportunities for savings and efficiencies. Unlike the levels proposed by Barington, the associated Chico's FAS operating improvements are carefully structured in order to drive savings without compromising the customer service that has long differentiated the company's brands and fostered customer loyalty.”
Chico's annual meeting is scheduled for July 21. The Fort Myers-based company operates 1,517 stores under the Chico's, White House | Black Market and Soma brands.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
