FORT MYERS, Fla. — With the recent acquisition of Fitigues, Chico’s is positioning itself as a multibrand retailer, seeking to broaden its customer base and continue aggressive growth, said Scott Edmonds, president and chief executive officer.
“In six years, we’ve gone from $259 million to $1.4 billion, from 260 to 780 stores,” Edmonds told about 100 people at Chico’s sixth annual Financial Analysts Day at company headquarters here. “The difference now is brands. Our goal now is creating and growing these strong brands — Chico’s, White House|Black Market, Soma and Fitigues.”
Edmonds stressed the growth potential for each of Chico’s brands. “White House|Black Market [acquired in 2003] has 200 stores now, and the potential for 700 to 850,” he said. “Soma, our one-year-old intimate apparel brand for the 35- to 55-year-old, has enormous potential, because no one is reaching out to this woman.”
The biggest challenge for Chico’s, one of the first retailers to exclusively target the over 35-year-old customer, is increasing competition as more players, such as Gap, enter that market, said Marie Driscoll, special retail analyst, Standard & Poor’s.
Still, Driscoll said Chico’s, “with incredible bench strength within the organization, should be able to continue 25 percent annual total sales increases and double-digit comp-sales growth.”
Chico’s experience building the White House|Black Market and Soma brands should serve the company well in developing Fitigues, she said. The company’s loyalty programs, and approach to inventory also gives Chico’s an edge.
“Their merchandise assortment is broad and shallow, which results in fewer markdowns,” she said. “They’ve trained their customers not wait for sales.”
Half of Chico’s and White House|Black Market stores are performing well enough to call for increased square footage, Edmonds said. Plans for 2006 include a total of 150 new store openings: 60 Chico’s, 70 White House|Black Market and 20 Soma stores. Chico’s will also launch 20 Soma “boutiques” — smaller shop-in-shop versions within its Chico’s stores.
“This allows us a faster roll-out of the brand,” said Chuck Nesbit, executive vice president, chief operating officer, Soma. “The in-store boutiques are cheaper, in terms of staff and real estate. Soma moves out [to their own locations] within two, three years, and Chico’s expands into the Soma space.”
Related Articles
You May Also Like
Edmonds said the acquisition of Fitigues two weeks ago gives Chico’s a new customer — a woman who wants casual, luxury apparel. In a post-presentation interview, Edmonds described Fitigues, the Scottsdale, Ariz.-based line, as “a cross between Eileen Fisher and Juicy — a hipper, younger, more fitted look than Chico’s more novelty apparel.”
Fitigues, cofounded in 1988 by Steve and Andi Rosenstein, sells exclusively in 14 company-owned stores nationwide. At an average price of $100, the line features luxury European fabrics with relaxed silhouettes such as cargo pants, T-shirts and tank tops, and includes some men’s and children’s wear.
Edmonds said Fitigues’ growth would be slow, with the next few years spent strengthening infrastructure, staff, systems and training, for a planned retail rollout by mid-2008.
Each brand’s top executives gave presentations including:
- CHICO’S: Sales reached $1 billion in 2005 with another year of double-digit same-store sales increases.
- WHITE HOUSE|BLACK MARKET: Sales reached a quarter of a billion dollars for 2005, with 30 to 50 percent comp-store increases each quarter.
- SOMA: Expansion plans include building direct sales and e-commerce.
- FITIGUES: The plan is to leverage Chico’s financial, operations and supply chain expertise to build Fitigues to a “global luxury comfort brand.”