The Chico’s FAS is reinstating executive pay, while restructuring the c-suite
As of July 5, all Chico’s FAS board members, executives and corporate associates who were not furloughed during the coronavirus shutdown will once again receive full pay.
“We appreciate the commitment and personal financial sacrifice of our associates during this challenging time,” Molly Langenstein, chief executive officer and president of Chico’s FAS, said in a statement. “We value their unwavering dedication and once we began reopening our stores, it was important that we act as quickly as possible to restore their full pay.”
The retailer, which includes White House Black Market, Soma and TellTale, in addition to the nameplate brand, furloughed the majority of its associates in April while its 1,341 boutiques across North America were temporarily closed. All associates who were not furloughed — with the exception of employees in the company’s distribution center — received a 50 percent reduction in pay, including the company’s executive team and board.
As of Thursday, 90 percent of the company’s store fleet has reopened, according to a representative from Chico’s. The remaining stores will open on a case-by-case basis, depending on local conditions, the representative said.
In addition, nine stores permanently closed last quarter. The retailer is anticipating another 50 to 60 more stores will permanently close later this year.
Chico’s has been increasing its digital efforts during the pandemic. Even so, the mass store closures cost the retailer $178 million.
In addition, the company has made a number of changes to its c-suite. On Wednesday, former ceo and president of Chico’s FAS Bonnie Brooks transitioned to executive chairperson of the board. Langenstein, who has led the apparel group as president of Chico’s and White House Black Market for the last 10 months, became ceo and president. She is now also a member of the board.
As part of the restructuring process, Chico’s former intimate apparel group president Mary van Praag, who oversaw the Soma and TellTale brands, has also left the company. A representative for Chico’s FAS said the company will not seek a replacement for van Praag and Langenstein’s roles as brand presidents. Instead, the merchant heads at Chico’s, White House Black Market and Soma will report directly to Langenstein, helping streamline operations within the company.
William Simon, a member of the board and former president and ceo of Walmart U.S. and senior adviser to KKR private equity firm, has assumed the role of lead independent director on the board.
In April, the company said it implemented a number of changes to help reduce cash burn by approximately 30 percent.
“We have deferred the majority of payables and are renegotiating all contracts, including real estate…primarily to achieve a leaner, streamlined structure more efficiently aligned to the needs of the business,” the company said at the time.
The company’s stock, which closed at $1.26 a share Thursday, is down 60 percent year-over-year.