Chico's Coconut Point storefront.

“It’s a great time to be in specialty retail. If you’re not special, you won’t be here,” said Chico’s FAS chief executive officer Shelley Broader.

This story first appeared in the September 29, 2016 issue of WWD. Subscribe Today.

WWD caught up with Broader Wednesday, who was in New York for a company presentation to Wall Street analysts.

In an interview after the presentation, Broader explained that it used to be specialty was defined as a retailer that was not a department store. “Today, specialty means clarity in the offerings that only you can deliver. It means being purposeful in everything you do that carries your brand,” she said.

Noting that there’s been a tremendous amount of change in the industry, Broader was also quick to emphasize that the company is “on its way to a double-digit operating profit.”

One metric that got the attention of analysts was the 50 percent sales transfer when a store closes to other stores or online, which Broader said is quantifiable from shopping data from the company’s loyalty program, which counts over eight million members in its database. The industry average is between 20 and 30 percent. Broader said the information from the program is both “mineable and accessible.” And as much as there is now a reliance on technology and data analytics, Broader said the two even when combined are “not greater than the merchant. The merchant uses the tools to answer questions. We can know within 48 hours [of putting something on the sales floor] not to markdown anything yellow. However, a bell-sleeve top might not have had even one sale, and we’ll know to markdown just that one item but not the entire collection.

Broader also said that if, as an example, a jacket keeps getting returned, “We know that somebody has to go out and get that jacket off the floor.” That also means removing it from the web site because a returned jacket can be shipped out again and returned again, incurring additional costs on the fulfillment side, such as shipping costs. That’s where technology can be a great tool, because it helps you “understand the wins and mistakes early on,” Broader said.

But she was also quick to note that despite the success that can be garnered through quick responses from data analysis, “none of that takes the place of the beauty of the product. The product has to be trend right, and appropriate for the brand. Data in itself is not a fashion statement.”

Broader said the company has adjusted the cadence for when the majority of the product hits the sales floor. Because the Chico’s customer shops once every six to eight weeks, that means slowing down the cadence to match her shopping cycle. “It’s about what is the appropriate rate of newness matched to how the customer shops and then how to exceed it so that each time our regular customer comes in she will see newness in the store,” Broader said.

Broader also sees opportunities in partnerships and licensing, noting that the company is open-minded about the possibilities. “Where does she want to see our product outside a Chico’s boutique [and] what other retailers share our demographics?” Broader said were key questions, as well as analyzing what might complement the Chico’s brand that would resonate with the consumer.

While some of the points have been made before, during the company’s earnings conference calls, one key takeaway from the presentation is that 90 percent of the chain’s transactions in 2015 were from its existing customer base, reflecting a very loyal consumer base. Another is the plan to roll out iPads for store associates equipped with the ability to tailor the visit to match the consumer’s virtual closet. The example Broader gave was enabling the store associate to see what bottoms the consumer bought over 12 to 18 months, and then show virtually what new tops would look like when matched with those bottoms.

Also, by 2018, Broader said a customer would be able to see where the inventory resides and what’s in short supply, all the better to know which store to go to for an item or whether one should order online.

The company recently relaunched its Zenergy line, targeting the ath-leisure lifestyle, and it has updated its Traveler’s Collection with modern silhouettes.

Todd Vogensen, chief financial officer, added that capital expenditures declined from 5 percent of sales to 2 percent in the second quarter of 2016. Chico’s targets the consumer that is age 45 and up, while White House|Black Market has an age range from 35 to 55. Its lingerie concept Soma, which represents the largest growth opportunity for the company, has been moving closer to the White House|Black Market demographic range, Vogensen said.

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