Soma Intimates

Soma continues to lead the Chico’s FAS comeback

The retail company, which includes the intimates brand, along with White House Black Market, TellTale and the nameplate brand Chico’s, released quarterly earnings results during Thursday’s pre-market hours, causing company shares to jump about 2 percent. 

While Soma improved on top-line sales, both for the quarter and year, Chico’s and White House Black Market also improved on same-store comparable sales — the first time all three brands have achieved this feat since 2014. (Direct-to-consumer lingerie brand TellTale was created less than a year ago.) 

White House Black Market

A White House Black Market store.  Courtesy

“We are extremely pleased with the significant sequential turnaround in our business,” Bonnie Brooks, chief executive officer and president of Chico’s FAS, said in a statement. “Our strong performance can be primarily attributed to our disciplined focus on driving sales through improved and elevated product aligned more closely to our customer’s expectations. In [the fourth quarter], we continued to deliver on each of our strategic priorities, with a renewed rigor and relentless attention to every detail of operating our businesses. We are especially pleased with both our significant digital growth and frontline growth, as we continue to work toward delivering our unique and personal service through all channels of the company.”

But the company’s stock, which is down more than 32 percent year-over-year, quickly turned negative after the market opened and closed down 6.7 percent.

For the three-month period ending Feb. 1, company revenues were $527 million, compared with $524 million the same time last year, while losses narrowed to $4.3 million, down from a loss of $16.6 million during 2019’s fourth quarter. 

By brand, Soma was the clear winner during the quarter with $105 million in sales, up from $97.8 million the same time last year. Revenues at Chico’s, the company’s largest brand, were $249 million for the quarter, down from $251 million the same time last year. White House Black Market had $171 million in sales, down from $175 million the prior year. 

Soma Intimates

Inside of a Soma store.  Courtesy

For the full fiscal year, sales topped more than $2 billion, down from $2.1 billion the previous year. Chico’s total sales for the year were $1.04 billion, down from $1.09 billion a year earlier. Sales at White House Black Market totaled $627 million, down from $694 million the year before. Meanwhile, Soma’s total sales improved for the year to $365 million, up from $337 million a year earlier. 

Soma also had the most noticeable improvement in same-store comparable sales: 9.4 percent for the quarter, on top of a 6.2 percent gain the same time last year, and 8.8 percent improvement for the year, on top of a 0.6 percent gain a year earlier. 

For the quarter, Chico’s and White House Black Market’s comparable sales also rose, by 0.9 and 0.1 percent, respectively. 

Chico's store

A Chico’s storefront.  Courtesy

The Fort Myers, Fla.-based company’s turnaround plans began last year, when it said it was planning to close 250 stores across the portfolio in the next three years to curb losses and focus on its digital growth. 

Since then, the intimates division, which includes TellTale, has been the clear growth driver for the company. 

In November, Soma was honored with a Femmy Award — perhaps the most prestigious award in the intimate apparel industry — for innovation. Last fall, Newsweek magazine rated the brand the best brick-and-mortar lingerie experience for 2020, thanks in large part to the SomaInnofit bra, a smart bra. And the brand continues to introduce technologies in its innerwear, like the “Vanishing 360” bra released earlier this month. 

The store closures set in motion last January included some Soma stores. But Mary van Praag, president of Chico’s FAS intimates division, said the company is focused on optimizing the store fleet. That means closing some stores, but also opening ones that could produce lucrative results.

On Thursday morning’s conference call with analysts, Molly Langenstein, president of the apparel group at Chico’s FAS, said the company plans to open about 10 new Soma stores this year.

“There’s huge runway for growth ahead in Soma because we’re still underpenetrated in many markets,” Langenstein said.

“Soma is making a major contribution to the total company,” she added. “We’re riding a wave that is the opposite in terms of some of our competitors in terms of being modern and being solution based.”

Executives on the call added that the company is looking into potentially expanding across the portfolio in 10 new markets.

As of Feb. 1, the company had 1,341 stores, down from 1,373 the previous quarter, in the U.S. and Canada. Soma boutiques nationwide number about 300, some with TellTale shops-in-shop, with roughly 2,200 bra-fit experts. 

Meanwhile, the company’s digital growth continues in double digits for the year.

“So we know that [investment] is paying off,” Langenstein said. “What we know about our customer is that the majority of her shopping begins online. It may not end online, but it begins there.”