Chico's FAS wants to color coordinate its customers with its own brands of chic clothes. Once a Mexican folk art shop, Chico's owns and operates more than 1,250 specialty stores in 48 states, the District of Columbia, the US Virgin Islands, and Puerto Rico. Its stores are mostly located in enclosed malls and shopping centers under the banners Chico's, White House/Black Market (WH/BM), and Soma. The boutiques target middle-to-high-income women ages 30 and up with clothes made primarily from natural fabrics (cotton, linen, silk). Its casual wear includes tops, pants, shorts, skirts, and dresses, as well as jewelry and accessories. Chico's FAS was founded in 1983 by ex-chairman Marvin Gralnick and wife Helene.
Chico's portfolio consists of four brands: Chico's (about 685 boutiques and outlet stores); White House/Black Market (WH/BM) with some 390 locations; some 180 Soma stores that sell intimate apparel; and its newest online and catalog brand Boston Proper (acquired in fall 2011). Together, Chico's and Soma account for two-thirds of the retailer's total sales.
Sales & Marketing
To drive traffic to its stores and websites Chico's relies on national print and broadcast campaigns, email and direct marketing, social media (Facebook and Twitter) and other outreach programs. It also utilizes loyalty programs to retain customers. The company spent more than $110 million in fiscal 2012 (ends January) on advertising and promotions, up from nearly $87 million and $65 million in fiscal 2011 and 2010, respectively.
Chico's sales increased more than 15% in fiscal 2012 (ends January) vs. the prior year, while net income grew 22% over the same period. Fiscal 2012 marked the third consecutive year of increased sales and profits for the resurgent company, which posted a record $2.2 billion in sales. Chico's credited the double-digit increase to an 8% jump in same-store sales, new store openings, and the addition of $39.5 million in sales from the acquisition of Boston Proper. The company also believes its marketing efforts have helped lure back lapsed customers.
Following a rough patch during the deep recession and steep drop off in women's clothing sales, the retailer has worked to revive its Chico's brand stores by improving customer service and merchandise. Judging by the recent run up in sales CEO David Dyer (who joined the company in 2009) is meeting with considerable success. Indeed, historically fast-growing Chico's is back in growth mode. In fiscal 2012 (ends January) the chain added more than 100 new shops and plans to add about 125 locations in fiscal 2013. Also, in 2011, Chico's purchased Boston Proper, a privately-held women's retailer for about $205 million to expanded its direct-to-consumer business. The company was enticed by Boston Proper's 2010 net revenue of about $110 million and its multi-catalog circulation of 35 million. Besides boosting its earnings, the move allowed Chico's to integrate marketing, circulation, and sourcing, among other functions. While Boston Proper doesn't operate stores, Chico's plans to test stores for the brand in fiscal 2013. Dyer has credited a renewed focus on the customer and fresh marketing campaigns for Chico's recent success.
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