Sycamore Partners has again lowered its offer to buy Chico’s FAS Inc., due to the declining performance of the specialty retailer.

The offer has dropped to $3 a share, from $3.50 last May, and from $4.30 earlier this year. Chico’s shares closed at $3.21 on Wednesday, up $0.1 or 3.2 percent.

Chico’s responded Wednesday by stating it “will carefully review Sycamore’s revised proposal to determine the course of action that it believes is in the best interests of Chico’s FAS shareholders.”

The Fort Myers, Fla.-based retailer noted that its board has already reviewed and unanimously rejected the previous higher-priced proposal from Sycamore submitted on May 10. The board believes Sycamore is substantially undervaluing Chico’s and that the previous offers were not in the best interests of its shareholders.

Sycamore has lowered its bid for Chico’s.  Shutterstock / Ken Wolter

Stefan Kaluzny, managing director of the Sycamore private equity firm, on Wednesday sent a letter to Chico’s chairman David F. Walker, complaining that “Chico’s has declined to engage with us despite its continued poor performance.

“Since our prior offer on May 10, the company’s trailing 12-month EBITDA has fallen almost $35 million through the first quarter and management has lowered its guidance for the year,” Kaluzny wrote. “This continues a pattern of the company lowering its guidance and then not meeting it.”

Sycamore’s revised offer to acquire all of the outstanding shares of Chico’s common stock for $3 per share “represents a significant premium to what we believe the unaffected trading price of your stock would be absent takeover speculation, and it offers a compelling opportunity to lock-in certain value for your shareholders in the face of further deterioration in your business and the volatility in the market,” Kaluzny said.

Sycamore, which owns Belk Inc., Staples and has investments in several other brands and retailers, is offering to buy Chico’s in cash and equity, with no third party financing.

Sycamore noted that Chico’s full year guidance requires a significant improvement in performance trends and an increase in earnings before interest, taxes, depreciation and amortization, or EBITDA, of $10 million, or 25 percent, in the second half of the year. “Should our due diligence provide us the confidence that this plan is achievable, we would be prepared to increase our offer,” Kaluzny said in his letter, adding, “If you provide us with due diligence access, we would be prepared to sign a customary confidentiality agreement with a standstill through the end of this year. We hope that you will engage with us in pursuing a negotiated transaction.

As of May, Sycamore owned approximately 6.6 percent of Chico’s.

Chico’s recently fired its chief executive officer Shelley Broader and gave the reins on an interim basis to Bonnie Brooks. Chico’s said the board’s search for a new ceo is ahead of plan.

Aside from leadership changes, the company said it is focused on “driving stronger sales through improved product and marketing; optimizing the customer journey by simplifying, digitizing and extending the company’s unique and personalized service; and transforming its sourcing and supply chain operations to increase product speed to market and improve quality.”

For the first quarter ended May 4, Chico’s reported net income of $2 million, or $0.02 per diluted share, compared to net income of $29 million, or 23 cents per diluted share, for the year-ago quarter.

Net sales were $517.7 million compared to $561.8 million in last year’s first quarter. Comparable sales dropped 7 percent. There was also the impact of 41 net store closures since last year’s first quarter.

For 2018, the $2.1 billion Chico’s reported $35.6 million in net profit from continuing operations, versus $101 million in net profit from the year before.

Chico’s operates more than 1,400 stores under the Chico’s, White House|Black Market and Soma banners as well as TellTale, its new direct-to-consumer lingerie brand.