ASHEVILLE, N.C. — Chico's FAS Inc. is expanding on all fronts.
The company on Tuesday held its first annual shareholders meeting outside of Florida at the Biltmore Estate here, with about 150 people in attendance. What they heard was a company presentation recapping the year, while highlighting the anticipation of steady growth year-over-year.
And, in an exclusive interview after the meeting, Chico's chief operating officer and chief financial officer Charles Kleman showcased just what that growth could be down the road.
"The performance of White House|Black Market [at this point in time] is almost a mirror of what Chico's was like in 1997 and 1998 before it started its big growth spurt," said Kleman.
The White House|Black Market so far has "only reached 2 percent to 3 percent of its potential customer [base] penetration," he continued.
The company hopes to change that by expanding the size of the stores — the new ones will be about 1,800 to 2,500 square feet — and adding about 60 percent more inventory than last year. The larger format will allow the retailer to have more product density and, in turn, result in greater in-stock sizing options for the customer, the cfo noted.
White House|Black Market same-store sales in May rose 30 percent from a year ago, partly because of the debut of television advertising from April through May as well as increased product density in the stores, company executives said.
Kleman expects comps gains for the rest of the year, "especially as Web sales will begin in September after Labor Day."
There is about a 20 percent overlap between the Chico's customer base and White House| Black Market, company executives noted.
Another expansion opportunity is Soma by Chico's, the firm's lingerie concept store. Chico's operates 10 freestanding Soma stores, and expects to open between four and six more this year.
"There's an opportunity for us because department stores are so promotional [and] Victoria's Secret is chasing after a younger customer. The department store customer is complaining about overassortment and a sea of bras in an intimidating environment," said Charles Nesbit Jr., executive vice president for operations at Chico's.Soma's main category offerings are bras and sleepwear. The concept will include more depth to its bra inventory, including fabrications and memory foam, while sleepwear is mostly novelty driven and can cross over with the fashion element at Chico's.
Kleman and Nesbit agreed that Soma has the potential to be a "$1 billion opportunity" down the road, with the current plan to grow it to "500 stores and $200 million in sales." The executives did not provide a timetable for either the 500 store count or when Soma might hit $1 billion in sales.
With all the growth and expansion on the agenda, the company is also planning a new corporate headquarters.
"We just contracted to buy 105 acres in Florida and also just hired TVA Architects," said Scott Edmonds, president and chief executive officer.
The company said on June 9 that it was considering a purchase of land on the corner of Alico Road and I-75 in Fort Myers, Florida.
According to Edmonds, the new site will house a headquarters campus for all three of its divisions under one roof. The firm's current headquarters is a 147,000-square-foot facility on 35 acres in Lee County in Fort Myers. The new one, at the corner of Alico Road, will be built in three phases. Phase one will be complete in 2007 or 2008, with the completion of all three phases by 2020. Portland, Oregon-based TVA, which designed the Nike campus facility, will work with Chico's to design a similar type of structure.
So far, the retailer plans to open a total of 110 to 120 stores in the current year, including the four to six new Soma stores; 45 new White House|Black Market stores, and the balance under the Chico's nameplate.
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