Chico’s to overhaul ops and close 250 stores as its focuses on omnichannel
Chico’s FAS is reducing its store portfolio and reviewing to operations to find efficiencies and cost savings.
The women’s apparel retailer announced it will close at least 250 stores in the U.S. over 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 currently operates 1,431 stores in the U.S. and Canada
The closings will be across the company’s three brands — Chico’s, Soma and White House Black Market — and weighted to years two and three. Chico’s said the shutterings will allow it to take advantage of lease expirations, while improving profitability and return on invested capital.
In addition, Chico’s said it has started a comprehensive review of its operations with a goal of improving efficiencies. The review will include an assessment of SG&A expenses and business processes across the entire organization.
“Our focus is on implementing those initiatives that drive the greatest levels of growth and profitability of our business,” Chico’s CEO Shelley Broader said. “This includes continued improvement in each of our differentiated brands, increased flexibility and efficiency across our organization, and fully leveraging the capabilities of our robust omnichannel platform to meet the ever-evolving needs of our customers and to enhance shareholder value."
Chico’s noted it has made significant progress in developing an integrated omnichannel platform with advanced capabilities to modernize, digitize and personalize the customer experience. The retailer cited its investments in such technologies as a shared inventory system, endless aisle, a system that enables store associates to personalize the customer experience, and buy-online -pick-up-in-store capabilities. Chico’s has also forged partnerships with ShopRunner, Amazon and QVC.
“As a result, the company now has the technology and tools in place to capture and stay connected with its eight million customers in new ways, whether in-store, online or virtually, and to fully activate its omnichannel strategy,” Chico’s stated.
Chico's also updated its fourth-quarter guidance and said sales and same-store sales were trending better than its previous outlook. It is now expecting sales to be down in the low double-digits, compared with a prior expectation of a mid-teens decline. Fourth-quarter gross margins are expected to decline by about 500 basis points compared with 2017, compared with a previous expectations for a decline of 400 to 500 basis points.