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Chico’s to go private in $1 billion deal

Chico’s FAS operated 1,258 U.S. stores as of July 30.
Chico’s FAS has agreed to be acquired by Sycamore Partners.

Chico’s FAS has agreed to be acquired by a retail-focused private equity firm. 

In a deal valued at $1 billion, the women’s apparel and intimates retailer will be acquired by  Sycamore Partners.   Once the transaction is completed, Chico's will become a privately held company and will no longer be listed on the New York Stock Exchange.

Under the terms of the agreement, Chico's shareholders will receive $7.60 per share in cash. The per share purchase price represents a 65% premium to the company's closing stock price on September 27, 2023 (the last trading day before the announcement of the transaction).

The deal is expected to close by the end of the first quarter of 2024. It includes a 30-day “go-shop” period (expiring on Oct. 27) during which time the retailer can solicit other bids.

As of July 29, Chico’s operated 1,258 stores in the U.S. and sold merchandise through 58 international franchise locations in Mexico and through two domestic franchise locations in airports.  The company operates three brands: Chico’s, Soma and White House Black Market.

 In a statement, Chico’s CEO and president Molly Langenstein said the deal would give the company “additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands.”

"Sycamore Partners has an outstanding record in the retail industry in partnering with management teams to help businesses reach even greater levels of success,” she added. “They share our commitment to providing solutions, building communities and creating memorable experiences to bring women confidence and joy.”

For its most recent quarter, Chico’s reported net income of $59.3 million, or $0.49 per   share, compared to net income of $42.0 million, or $0.34 per share, for the year-ago period. Net sales fell 2.4% to $545.1 million, with a comparable sales decrease of 3.0%.

“We have long admired the Company's three iconic brands, including Chico's,White House Black Market and Soma," said Stefan Kaluzny, managing director of SycamorePartners. "We look forward to partnering with the Company's more than 14,000 talented associates to grow these brands by continuing to deliver excellent products and service to their devoted customers.”

Solomon Partners, L.P. is acting as financial advisor to Chico's FAS, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor.

Kirkland & Ellis LLP is acting as legal advisor to Sycamore Partners.


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