Comfy clothes in the pandemic provide retailer a sales boost

Chico's FAS, proving anytime is a good time to embrace change, utilizes unusual time to rebrand, rethink and refocus some campaigns.

By Mark Gordon
| 9:10 a.m. September 9, 2020
| 0 Free Articles Remaining!

Chico's FAS Kimberly Grabel says during the pandemic the company had to "think differently, get resourceful and work in new ways."

Strategies

Giant corporations aren’t known for being nimble and making adjustments on the fly.

Clothes closed

Chico’s FAS has been scaling down its portfolio of stores for several years — mostly a response to customer shifts to e-commerce. The pandemic has accelerated that effort.

The Fort Myers-based women’s retailer recently hired A&G Real Estate Partners to help assess its real estate portfolio, what CEO Molly Langenstein, in an earnings call, terms “an arduous process.” The company, in the Aug. 26 earnings call, reports several developments, including:

• Restructuring its lease portfolio, which led to rent abatements for fiscal 2020 and savings into the “eight figures,” interim CFO David Oliver says;

• Temporarily suspending rent payments for stores closed in the second quarter and negotiating other rent payments as stores reopened; and

• Closing 19 stores in the second quarter, bringing year-to-date closings to 28. Officials anticipate permanently closing an additional 25 to 50 stores.

“We know there will be some store shrink in the coming year,” Langenstein says in the call, “as we are holding our stores to higher profitability standards, either through increased sales per square foot or lower rent.”