(Filed Under wholesale Lingerie News). Chico’s FAS, Inc., the parent company to the Soma intimates brand as well as the Chico’s and White House Black Market apparel labels, announced it will “close at least 250 stores in the U.S. over a three-year period,” including an unspecified number of its lingerie shops.

Chico’s confirmed the “closings will be across the three brands and weighted to years two and three.” The company already closed at least eight Soma stores in 2018, trimming from the 270 full price shops it reported as of February 3, 2018 to the 262 it reported on November 3rd. As of the latter date it was operating an additional 19 Soma outlets.

In total, “as of November 3, 2018, the Company operated 1,431 stores in the U.S. and Canada and sold merchandise through 83 international franchise locations in Mexico.”

Soma is currently the most successful of the three brands. In the 13 weeks ended November 3, 2018, comparable sales at Soma reversed direction and headed 2.4% higher. (The brand had previously posted negative comps for five quarters in a row). But for Chico’s FAS as a whole, comps were down 6.8%. Comparable sales at the Chico’s division were down 10.2%, and at the White House Black Market division they were down 5.1%. Sales and earnings were also down. The company earned $6.481 million on sales of $499.877 million, compared to a net profit $16.690 million on sales of $532.287 million in the thirteen weeks ended October 28, 2017. For Soma alone, sales rose slightly in the quarter to $72.569 million, compared to $72.462 million in the same quarter in 2017.

Looking ahead to its fourth quarter ending February 2, 2019 and is fiscal full year 2018, Chico’s FAS said it “anticipates a low double-digit decline in net sales compared to its previous expectation for a mid-teen decline, which includes the negative impact of the 53rd week of $29 million in fiscal 2017, and a mid-single digit decline in consolidated comparable sales, versus its previous outlook for a high single-digit decline in consolidated comparable sales.”

Apparently the lingerie division will again be the exception. So far for the fourth quarter “Soma is strong with sales trending well above expectations.”

Company-wide, Chico’s “expects fourth quarter gross margin rate to decline approximately 500 basis points compared to fiscal 2017, primarily driven by the initial ramp-up in costs from the Company’s omni channel programs, more aggressive promotional cadence to clear through seasonal merchandise and deleverage of fixed costs from lower sales.”

Further details on the store closings and other plans will be revealed on March 6 when Chico’s reports its full year results. Said CEO Shelley Broader, “our focus is on implementing those initiatives that drive the greatest levels of growth and profitability of our business.” And the company pointed to “important investments in technology,” and “key partnerships with ShopRunner, Amazon and QVC” as parts of its emerging “omni channel strategy.” — NM

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Published 01-11-2019 by Nick Monjo