By  on July 18, 2005

NEW YORK — Soma by Chico's, the 10-unit lingerie chain created by the $1.1 billion Chico's FAS Inc., has aggressive plans to expand intimate apparel with six new Soma stores, to open by the end of the year.

Charles L. Nesbit Jr., executive vice president of operations, described the consumer who shops for intimate apparel at Soma stores "the Victoria's Secret graduate."

"The Soma consumer is tired of shopping in an overassorted department store environment," Nesbit said.

Armed with Chico's database of more than five million consumers — the majority in the 35-to-55 age range — the company believes Soma has the potential to grow into a multimillion-dollar powerhouse in the next several years. Companywide, an overall gross margin totaled 61.4 percent in 2004.

At the end of the first quarter, the company operated 465 Chico's stores, 27 Chico's outlets, 178 WhiteHouse/BlackMarket locations, four WhiteHouse/BlackMarket outlets and 10 Soma by Chico's intimate apparel sites. Combined sales of Chico's and Soma stores were up 22.5 percent to $267.6 million in the first quarter ended April 30 compared with the same period a year earlier.

"We're very selective about location for the Soma stores because we are building the brand, not the location," Nesbit said. "First of all, we are going to do two things: intensification in a market and the rest of the stores will be in a new geographical area, maybe north of the Mason Dixon line."

Existing Soma units — some of which are freestanding stores or located side-by-side with a pass-through to a Chico's store at an outdoor mall or lifestyle center — are in nine cities. They are: Atlanta; Birmingham, Ala.; Memphis; Dallas; Houston; Annapolis, Md.; Scottsdale, Ariz., and Sarasota and Fort Myers, Fla., where the parent company is headquartered. Nesbit would not give sales-per-square-foot figures, but said: "Retail sales are tracking on plan."

"By specialty store standards, Chico's is extremely high, $1,000 per square foot. [Soma's] not quite at that level yet," he said, noting that the average space of Soma stores is 2,000 to 2,200 square feet.

Space allocation is evenly balanced, with 50 percent comprising bras and panties, and 50 percent dedicated to sleepwear and loungewear.Terri Meichner, senior vice president and general merchandise manager for Soma, said one group of bras and daywear of microfiber nylon and Lycra spandex called the Travelers Collection has had "great success." Inspired by Chico's number-one selling Traveler's Collection of casual apparel, she said it has become an "important signature fabric because of its easy care and soft hand."

Soma bras, which are designed to meet a target market of full-figured women sizes 6 to 16, are available in cup sizes up to 42DD. Best-selling bra sizes are 36C and D, said Meichner, noting that black and nude, not white, are the top-selling colors because the Soma customer is sophisticated and fashion-conscious. Suggested retail for bras is $32 to $52, panties sell from $8 to $28 and sleepwear is $28 to $128.

Nesbit said several marketing and promotional strategies have clicked for Soma, which features a "loyalty program" called Passport for the company's Chico's, Soma and WhiteHouse/BlackMarket customers. It offers savings, including a 5 percent discount on all purchases, free shipping and discounts on gift certificates.

"We also do inserts in catalogues in test markets in an effort to get customers to go to local Soma stores," Nesbit said. "We've also done stand-alone mailers in markets we're in and tried a number of direct-response vehicles such as 'come in and get a free fitting,' or 'we'll give you $5 off if you buy $100.'"

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