Fort Myers-based Chico’s FAS is looking for a new CEO — and possibly at a new owner.
The 36-year-old women’s fashion retailer — whose store brands include Chico’s, White House Black Market and Soma — has experienced declining sales the past three years while it struggles to compete with online sales and competitors evolving beyond the traditional brick-and-mortar retail model. Chico’s same-store sales dropped 4.9% in the last fiscal year, and total revenue fell 8.7% in 2018, from $2.3 billion to $2.1 billion
In late April, CEO Shelley Broader was let go, after just more than two years on the job and in the wake of news the company would close hundreds of stores across all three brands in an effort to cut costs. Both developments, more recently, captured the attention of the company’s single largest shareholder: New York private firm Sycamore Partners. Sycamore, with a 6.6% stake in the company, is bargain hunting, with an offer of $3.50 per share to buy Chico's, for a total of $406.7 million. The Chico’s board previously rejected an offer of $4.30 per share from Sycamore, saying even that was too low. The latest offer came in May 10.
The offer was reduced along with Sycamore's assessment of the company's fiscal health. “Given the rate and severity of the deterioration of the company’s business, we believe that it is in the best interests of all stockholders for the board to create those options,” wrote Sycamore in a letter to Chico’s board. Sycamore is not new to fashion retail. It owns brands such as Aeropostale, Coldwater Creek, Hot Topic, Jones New York, Kasper, Nine West and Talbots.
Sycamore has not suggested what it would do with the assets of the company — one of Southwest Florida's largest employers with its headquarters occupying a 10-building campus in Fort Myers. Chico’s, which began in 1983 as a single store on Sanibel Island and is named after a parrot owned by founders Marvin and Helene Gralnick, has not closed the door on Sycamore, saying it would review the latest offer.