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Chico’s Shares Surge on Renewed Buyout Speculation

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Sycamore Partners may be back in Chico’s life and looking to buy after bailing on a deal in February over disagreements about financing.

The rumored deal, which Bloomberg reported, sent shares of the women’s retailer up the most it’s increased in two years. Chico’s shares rose as much as 13 percent Monday, and closed at $16.66—a sizeable increase coming off of a 6.7% decline for the year-to-date.

The New York-based private equity firm, known for revamping retailers it buys, has reportedly made an offer for Chico’s, estimated to be worth $2.3 billion, and is securing financing sources familiar with the matter told Bloomberg.

Chico’s has seen slow sales for years, due in part to difficulty connecting with consumers outside of its older professional woman target market.

In its second quarter results released late last month, Chico’s said it saw a 1.4% net sales increase reflecting positive comparable sales and a net income of $35.5 million for the thirteen weeks ended Aug. 1, compared to $30.1 million in the prior year period.

Sycamore Partners has previously invested in brands like Aeropostale and Talbots, and last month entered into a deal to buy 127-year-old department store chain Belk last month for roughly $3 million, and said it plans to grow Belk by “executing its current strategic initiatives.”

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