Retailer, with sales drop, promises more cuts

FORT MYERS — First quarter sales at Chico's FAS fell 8% over the first quarter last year, and the company announced an expansion of its ongoing cost-cutting plan.

Sales dropped from $697.76 million in the 2015 first quarter to $642.97 million this past quarter, according to an earnings report.

The company, in the statement, says the cuts “are expected to reduce complexity and standardize processes across the organization,” so it can respond faster to what customers want. The moves include improving the supply chain and enhancing marketing efforts, the company adds. The marketing realignment and cuts, combined with a separate cost-reduction plan announced in April, is expected to bring $65 million to $85 million in annual savings, with $15 million of those savings coming in fiscal 2016, the company says. The previous cuts, designed to decentralize its marketing and digital commerce units, “places the decision makers directly into the company's three brands,” the company says.

First quarter revenues at Chico's also fell short of Wall Street expectations, which were $667.86 million. Chico's President and CEO Shelley Broader is confident the company can overcome its troubles. “We are taking action to improve our profitability, assuring our brands' leadership in the future and enhancing value for all of our shareholders,” says Broader, named to the leadership post in December, in the statement. “Our cost reduction and operating efficiency initiatives will position us to be more nimble and responsive to our customers' needs.”

Fort Myers-based Chico's operates 1,518 stores in North America under the Chico's, White House | Black Market and Soma brands.