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current news

Q2 Comparable Sales Down 0.9% At Soma


Soma’s new Enbliss Wireless Bra and Wireless Bralette.
Soma’s new Enbliss Wireless Bra and Wireless Bralette.

(Filed Under wholesale Lingerie News). Comparable store sales at Soma, the lingerie division of Chico’s FAS, continue to drop. They were down 0.9% in the most recent quarter, and for the first six months of this year they are down 3.2%.

Total Soma sales were also in the quarter, dropping 3.3% to $88.974 million in the three months ended August 4, from $91.968 million in the same quarter last year. For the first half, Soma sales are down 2.9% to $167.205 million from $172.237 in the first six months last year.

Meanwhile, second quarter overall sales, profits and comps all declined for the parent company, which also owns the White House Black Market brand. Chico’s sales dropped 5.9% to $544.7 million, from $578.6 million in the quarter ended July 29, 2017. Net income dropped 26% to $16.8 million, compared to net income of $22.7 million in the same quarter last year. And overall company comparable sales dropped 3.2%.

Chico’s blamed the overall sales and comps declines on “the unfavorable impact of the calendar shift due to the 53rd week in fiscal 2017, as well as the impact of 42 net store closures since last year’s second quarter.” Since May of this year, Soma itself has closed just one Soma “front line store,” reducing the total to 265.

The problems at Soma have persisted for more than a year. The brand has now reported negative comps in each of the past five quarters, following a string of consecutive quarter comp increases before that, that lasted for years, dating back to 2009.

During the conference call with analysts to discuss the quarter, Chico’s CFO Todd Vogensen partially addressed the issue explaining that “for Soma it’s really been a tale of two quarters in ramping, going into the back half. We talked about in Q1 that if Soma was up against a tough bra launch from last year and looking towards a new bra launches they went into second quarter and that has absolutely been the case. Progression through the quarter got nothing but better as Soma had its new bra launch with Enbliss and customer response has been really strong. June was very much soft launch, without marketing behind it. And then July, more of that full launch.” He added that the new Enbliss bra is the “second best bra in the collection, which is remarkable given the newness to the overall collection. So that is driving the overall comp and it gives us confidence going forward.”

Soma described the new product as an “innovative bra that offers superior soft comfort and support.” On the Soma website three Enbliss styles are currently offered, a wireless bralette for $44, a wireless bra for $48 and a “bra tank” for $54.

Despite the declining comps, Chico’s CEO Shelley Broader was upbeat about Soma on the call. “We are approaching the one year anniversary of Mary van Praag as Soma’s brand president and Mary and her team have made tremendous progress in repositioning the Soma brand. We saw improved momentum in the business in the second quarter driven by Cool Nights Sleep Separates, our core Vanishing collections and our new Enbliss bra. Notably, the performance of Enbliss has been so strong it is second only to our Vanishing Back Bra, which is our number one bestseller. Offering innovative solutions is at the core of everything we do at Soma. And our Enbliss collection offers superior soft comfort and support.”

She continued, “we introduced Enbliss in June and we went full scale in July and it is exceeding every expectation. We also recently launched Style Essentials, which replaces what we refer to as our loungewear assortment. Style Essentials offers effortless outfitting with easy care and easy wear flattering pants and tops with on-the-go lifestyle. We have created five key bottoms, each with a specific benefit that provides a unique solution to customers. We believe this improved line has a great opportunity to drive increased customer demand and we look forward to updating you on this new collection in future calls. Overall, Soma’s merchandise is improving and with our exciting new initiatives we are on track for stronger top line growth in the back half of the year.”

Broader added, “Following the successful premier in May, Soma had their second appearance on QVC in early August and we were a top performer in the fashion segment. We achieved our goal in the first five minutes on air and generated an 80% plus sell-through on an increased buy. We have additional events planned for the second half of the year and continue to see increased customer awareness and traffic to our Soma website as a result of these events. We continue to be pleased with the performance of ShopRunner, with sales doubling over the last quarter. Gross average order value continued to be nearly 30% higher than our average customer order. In addition, 34% of total customers who have ordered through ShopRunner are new or reactivated.”

Broader also reported, “we are seeing some incredible resurgence in our PJ business with our digital pajama bar where our customers can mix and match the collection digitally. And the way that that’s coming to life in-store, seamlessly, the same experience and fun that you are having online mixing and matching your pajamas in Soma, is very much mirrored with the in-store experience. And now, with the new launch of Style Essentials in lounge, where we don’t have to rely so heavily on just the launch of one single item. We have got that sort of record breaking Enbliss launch bringing people in, but there is much more for them to experience and buy both online and in-store at Soma.” — NM

The full Chico’s conference call can be found here: https://seekingalpha.com/article/4202870-chicos-fas-inc-chs-ceo-shelley-broader-q2-2018-results-earnings-call-transcript?page=1


more wholesale Lingerie News >>

Published 08-30-2018 by Nick Monjo

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