David F. Dyer, president and chief executive officer of Chico’s FAS Inc., knows a thing or two about turnarounds. He can orchestrate them, and knows what brings so many retailers and brands to the point of requiring them.
“The problems of Chico’s were very much the same with several of the other apparel companies I had worked with,” he said. “First, they lost focus on the customer. Second, they let expenses get ahead of the business. Those are the two common denominators I have seen at almost every place I’ve been.”
Dyer, whose long career took him to the former Burdines and Bamberger’s department store chains as well as Lands’ End, Home Shopping Network, Tommy Hilfiger and J. Crew, spoke during a discussion with Harold D. Reiter, chairman and ceo of Herbert Mines Associates.
Dyer was already a member of the Chico’s board when he became the company’s ceo in 2009. The company was losing money to the tune of $40 million and the stock price sank to $4. “We had a management team that actually didn’t like the customer,” Dyer said, noting that Chico’s had been serving women ages 35 and older and at the time had a hard time accepting that. By altering the offering, Chico’s “tried to make her a little younger and cooler, like everybody tries to do, I think,” Dyer said. “I would say, love the one you are with. We had one of the best customer segments in the industry that we really just walked away from.”
Chico’s had another problem — runaway expenses. “Expenses were up about 16 percent, and business was only up just 4 percent,” he said. “That only works in government. It doesn’t work in business.”
Dyer, brought in to revive the business, led Chico’s through management changes. “The biggest challenge to recruiting people is you have to sell the vision,” he said. “The company had 40 quarters of double-digit earnings growth. It was one of the great success stories for many years and it stumbled. We needed the people that could get it back in touch with the customer and get it moving again. I believed that people need to have a passion for the company they come into — a desire to make changes and do things well.
“When it comes to compensation, I don’t believe in big base pays. I believe in lots of incentives and building wealth over time through performance. With anybody who comes in, I want to make sure they are coming in with fire to get things done. I love people that are passionate about the business. People who can drive a business.”
Along with a new team came some serious fashion tweaking and redirecting the merchandising and marketing back to the core customer. “I can’t tell you how often people walk away from the customer they have,” Dyer said. “In some cases you do have to reinvent. But the most important lesson is, it’s always the customer first. You’ve got to listen to your customer. She is right 99 percent of the time. Let her lead you, and if you just take care of her to the best of your ability, I think you will do well.”
Dyer added: “We have a very different culture at Chico’s, it’s one that puts customers first. We are a service model; we are not transactional. Most of the selling goes on in the fitting room, not at the register.”
Under Dyer’s leadership, Chico’s has turned profitable and past the turnaround stage. The stock has recovered to between $18 and $19 a share. There has been a run of 11 quarters of positive comps and earnings growth, Dyer said. “We are feeling pretty good about where we are.”
Chico’s operates 601 Chico’s boutiques and 83 outlets, 364 White House|Black Market boutiques and 27 outlets, and 164 Soma Intimates boutiques and 17 outlets. Each brand also has a Web site and catalogues. The company also operates the Boston Proper direct-to-consumer business, which will open its first store in March. Chico’s was founded in 1983 as a small boutique selling Mexican folk art and cotton sweaters on Sanibel Island in Florida. FAS, a carryover from the company’s roots, stands for ‘folk art specialist.”
Store expansion is back in the game plan, with plenty of opportunity seen domestically. There is also an eye towards international expansion, but Dyer said that with all the room for domestic growth, there’s no urgency to go abroad. “We’ve got about 1,000 stores still to grow in the U.S. We will be looking at international, but we are not forced to do that. We will also down the road look at acquisitions,” he said.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye