Once a Mexican folk art shop , Chico's FAS clothes
chicas with upscale clothing across three brands. Chico's
owns and operates more than 1,500 specialty stores nationwide, and
in Canada and Mexico (in the latter through a franchise agreement).
Its stores are mostly located in enclosed malls and shopping
centers under the banners Chico's, White House Black Market (WHBM),
and Soma. The boutiques target middle-to-high-income women ages 35
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 FAS' three brands -- Chico's, White House Black Market
(WHBM), and Soma -- sell private branded clothing to
moderate-to-high income women.
Chico's, the largest of the three at over 50% of sales, sells
sophisticated, casual-to-dressy clothing, intimates, and
accessories. It runs some 700 locations (600 boutiques and 100
WHBM sells lower-priced women's clothing through some 500
locations (434 boutique and 72 outlets), and brings in 35% of
Soma sells lingerie, sleepwear, loungewear, activewear, and
beauty products. It accounts for 15% of revenue and has nearly 300
While Chico's rings up almost all of its sales in the US, the
fast-growing chain operates four Chico's stores and six White House
Black Market stores in Canada (a new market for Chico's). The
chain's largest US markets are California, Florida, and Texas,
which combined are home to over a quarter of its stores.
Chico's operates 1,501 stores across 48 states, Puerto Rico, the
US Virgin Islands and Canada, as well as 91 franchise locations in
Sales and Marketing
To drive traffic to its stores and websites Chico's relies on
loyalty and reward programs, digital marketing (mobile paid
marketing, banner advertising, affiliate programs), direct
marketing (catalogs, email, and calling campaigns), social
marketing, charitable giving, and more.
Chico's FAS has recorded uneven revenue in recent years, and in
fiscal 2017 (ended January) fell for a second consecutive year.
Sales fell 7% to $2.5 billion due to the completion of the
Boston Proper sale in fiscal 2016 and the resultant loss of
revenue. Excluding the absent Boston Proper revenue, sales fell 4%
due to lower comparable store sales. Transaction count and
transaction value both fell. The Soma business was the only one of
the three to record higher sales figures, up 3% to $344
Net income rose jumped from $1.9 million in fiscal 2016 to $91.2
million in fiscal 2017. The large increase was due to hefty
restructuring and other charges incurred in fiscal 2016 relating to
the Boston Proper sale, as well as lower selling, general, and
administrative expenses incurred in fiscal 2017.
Chico FAS' cash position strengthened as cash provided by
operating activities rose 17% to $230.7 million due to higher net
income and a decrease in income tax receivable.
Chico's growth strategy is by enhancing customer experience,
which has entailed heavy investment in omnichannel capabilities.
The company has enhanced its online presence and improved the
branding experience, and aims to convey the impression that its
three brands' websites are the largest store of each. It is working
to remove conceptual barriers between the various sales channels by
allowing customers to order online and collect in store. A surge in
mobile traffic triggered the optimization of its sites across
mobile platforms for Chico's and White House Black Market (WHBM);
it will complete the same process for Soma in 2017.
To improve profitability, the company is undertaking a store
closure program. In fiscal 2017 it expects to close 14-18 net
Chico's and WHBM stores and 6-10 net Soma stores. It expects to
open 10 stores in the same period.
The company sold off its direct-to-consumer Boston Proper
business in 2015 in order to focus more on its core operations.
Chico's was founded in 1983 by ex-chairman Marvin Gralnick and