Chico’s Q4 loss widens; closing 40 to 45 stores, adding in-store Soma shops
Chico’s FAS reported disappointing fourth-quarter sales and gave an update on store closings and its plans to roll out in-store Soma shops.
The struggling women’s apparel and accessories retailer closed 40 stores in fiscal 2020, ending the year with 1,302 locations, including 640 Chico’s, 403 White House | Black Market and 259 Soma stores. It expects to shutter from 13% to 16% of its remaining store fleet during the next three fiscal years. Some 40 to 45 of the closures are planned for this year, with the vast majority expected to be mall-based Chico's and White House | Black Market stores.
In addition, the retailer expects to add in-store Soma shops in approximately 50 Chico's locations.
Chico’s first revealed plans to reduce its portfolio in January 2019, saying it would close at least 250 stores in the U.S. during a three-year period in what it called a “strategic decision to rebalance the mix between its physical store presence with its digital network.”
Chico’s reported a net loss of $79.1 million, or $0.68 loss per share, for the quarter ended Jan. 30, compared to a net loss of $4.3 million, or $0.04 loss per share, for the year-ago quarter. Analysts were expecting a loss of $0.32 per share.
Total quarterly revenues fell 26.7% to $386 million. Total company comparable sales were down 24.9%. By brand, comparable sales fell 34.4% at Chico’s and 36% at White House | Black Market. The only bright spot was the company’s intimates and loungewear brand, Soma, where comparable sales increased 15.2%.
Total company fourth quarter digital sales rose nearly 20%.
For the full fiscal year, revenues fell to $1.3 billion from $2 billion a year earlier. The company lost $360 million, compared with losses of $12.7 million in 2019.
“While sales reflect the challenging environment, we took important actions over the past year to strengthen our financial and operating foundation and position our brands for market share gains,” stated Molly Langenstein, CEO and president of Chico’s FAS. “We enter 2021 as a digital-first, customer-led company with the capabilities to support continued improvement, enhanced value creation and a return to growth in the years ahead. We have a solid balance sheet, strong liquidity and the financial stability we need for the foreseeable future. Cost savings we achieved in 2020 will flow through to future years, demonstrating the discipline that is now core to our organization.”