(Filed Under wholesale Lingerie News). Soma’s comparable store sales jumped 9.4% in the thirteen weeks ended February 1, 2020, while comps for the entire fiscal year were up 8.8%.
Total fourth quarter sales for the intimates division of Chico’s FAS rose to $105,844,000, up from $97,855,000 in the three months ended February 2, 2019. For the year, Soma sales rose to $365,339,000 from $337,629,000 in fiscal 2018.
“Soma delivered its sixth consecutive quarter of positive comparable sales, driven by a strong response to our holiday offering, including record breaking sales during peak holiday period.” The comp gains were also “fueled by increased investments in inventory and marketing,” according to a company release. Other gains for Soma in the quarter were the “strong performance of Enbliss and Vanishing 360 collection with launch of new styles and extended sizes” and “record setting performance for sleep business, fueled by our Signature Cool Nights franchise.”
Despite the strong quarter, Soma reduced the number of stores over three months, closing four and opening one, ending with 244 “frontline boutiques” as of February 1, along with an unchanged number of Soma outlets at 18. On February 2, 2019 Soma had 258 boutiques, and during the year closed 15 and opened one. It started 2019 with 19 Soma outlets and closed one during the year.
However the strategy of reducing the number of Soma stores is apparently over. During the conference call to discuss the results with analysts Chico’s interim CFO David Oliver said the firm plans to open as many “as 10 new Soma stores in 2020.” He added that during 2019 Chico’s “total inventory was up 4.9% compared to last year, primarily due to plant investments in Soma to create and test additional assortment strategies.”
Chico’s president and CEO Bonnie Brooks continued, “we have a significant growth plan for Soma, supported by increased investments in the store footprint in 2020 and in digital, both for acquisition and new customers.”
She also claimed during the late February call, “We realized the opportunity to grow Soma exponentially early in 2019 and moved quickly to increase investments in inventory and marketing for the brand. This momentum is supported by our focus on creating a continuous pipeline of innovative and solutions oriented products, which are key for customer acquisition and retention. Our sleep business had a strong double-digit comp and a record setting Q4. Earlier this week, we announced an extension to Soma’s Vanishing 360 franchise with new styles and extended sizing. This launch and others will continue to increase sales through innovation.”
Several times in the call Brooks emphasized that product innovation led to Soma’s “truly spectacular run in 2019.” She continued, “Most importantly, the innovative team they have, and the product that they’re creating that is absolutely solution based. The launch they’ve had this -- earlier this week of Vanishing 360 has a fantastic tagline. It starts out with “we’ve got your back and your side and your friends.” It is a truly amazing product that’s resonating with customers. And that’s really a major part of the Soma success. Along with the innovation pipeline is further intensification of product in the stores and testing of product in the stores and that’s the additional inventory level that we were talking about.”
Brooks predicted, “There is huge runway ahead for growth in Soma because we are still extremely under-penetrated in our footprints across the country. And we also have a lot of other opportunities in front of us for additional distribution. So I would say that we are extremely excited about the Soma potential, and that’s why we have been investing in the marketing, the stores and the inventory.”
Brooks also revealed that Soma had worked with the Boston Consulting Group recently, “who came in and thoroughly analyzed the market and our own opportunities within the market. I mean, we do believe that we still have more growth in the categories, because we are still under-penetrated in certain categories of intimate. And so we have a lot of potential there. We’re riding a wave that is the opposite of some of our competitors in terms of being modern and being solution based. So we’re really -- we’re very -- feeling very strong about the opportunity. And, yes, Soma is making a major contribution to the total company.”
The Chico’s earnings release stated it “continues to focus on reducing its overall China penetration and diversifying its country of origin mix, which are tracking ahead of schedule. The company is making significant progress in securing partnerships with key vendors to create a leaner, more efficient supply chain.” — NM
The complete Chico’s conference call can be found here: https://seekingalpha.com/article/4327779-chicos-fas-inc-chs-ceo-bonnie-brooks-on-q4-2019-results-earnings-call-transcript
Disclaimer: The views expressed in comments published on bodymagazine.us are those of the comment writers alone. They do not represent the views or opinions of Bodymagazine or its staff.
NOTE: Your Email will not be displayed.