Women’s fashion retailer Chico’s FAS announced Thursday that it will shutter 120 of its stores over the next two years. The announcement came just two days after the Wall Street Journal reported that Sycamore Partners had abandoned its attempt to acquire the clothier.
In its fourth quarter report, the company, which sells mostly women’s private branded casual-to-dress clothing for its four brands, Chico’s, White House | Black Market, Soma and Boston Proper, also said it would eliminate 240 existing jobs.
Chico’s FAS said it will close 35 stores in fiscal 2015, which ends Jan. 31 2016, and a total of 120 through 2017 in an effort to “improve the overall productivity of its store fleet.” The closures are expected to result in expense savings of roughly $55.2 million once complete.
This fiscal year, the company also plans to open roughly 40 new stores, considerably less than the 109 opened in 2014 and 135 in 2013.
Tightening spending will be key for the company this year as capital expenditures are expected to be around $100 million, a 29 percent drop from its three-year average.
Chico’s FAS also said it would repurchase $250 million worth of its own shares this quarter, and shares ticked up 2.94% to $17.87 in trading Thursday.
For the 13 weeks ended Jan. 31, Chico’s FAS reported a net loss of $31.8 million, or $0.21 per diluted share, following a $300,000 loss in the fourth quarter of 2013. Net income for the period totaled $7.5 million compared to $5.9 million in the prior year quarter. Net sales were up 7.6% to $656.9 million, namely reflecting 75 net new stores.
Todd Vogensen, Chico’s FAS executive vice president and chief financial officer, said, “The changes to the Company’s capital allocation and cost reductions announced today were carefully considered to ensure that we continue to operate from a position of strength and drive profitable growth and value creation.”