FORT MYERS, Fla. — Scott A. Edmonds, president and chief executive officer of Chico’s FAS, quoted the legendary aviator Amelia Earhart last week as he spoke about the specialty retailer’s future: “‘Never interrupt someone doing what you said couldn’t be done.’”
After posting a ninth consecutive year of double-digit comp-sales increases and reaching $1 billion in annual sales, Chico’s has planned more than 100 new stores planned for this year. That includes units for the White House/Black Market brand, which it acquired in 2003, and the intimate apparel chain Soma that launched last summer. Chico’s has no major acquisitions or launches planned before 2008.
“We’re looking to strengthen management and clarify our focus,” said Edmonds, speaking at the fifth annual financial analysts day at company headquarters on Friday. “We went from $259 million in 2000 to $1 billion in 2004, and we’re looking at $2 billion in the near future.”
Chico’s wants to strengthen sourcing in China and expand successful categories, including denim, high-margin key items and accessories. White House/Black Market will account for about 45 of the new stores as the chain maximizes Chico’s sourcing potential and begins television advertising and Web sales. Soma, with 10 stores, will open six more, with potential to capitalize on an underserved lingerie niche, executives said.
Among other positions, Chico’s is searching for a director of Far East sourcing and a senior vice president of merchandising for both White House/Black Market and Soma.
For the Chico’s brand, this year’s biggest success was the November launch of Platinum, a premium denim collection inspired by the success of contemporary jeans lines such as Seven For All Mankind. Chico’s premium jean, at $78, is around one-third cheaper. The Platinum label will expand denim offerings and other categories, including pima cotton T-shirts, at $38 to $40 that customers perceive as high quality and value.
“We’re not trying to be Barneys, but we’re addressing the customer who wants better fabrics and construction,” said Pat Murphy Kerstein, executive vice president and chief merchandising officer, who added that consumer reaction was “way beyond expectations.”
Chico’s will also expand high-margin key-items programs such as tanks, T-shirts and layering sweaters, as well as strong accessories additions like eyewear and footwear. Best-selling spring trends have been color, Brazilian-inspired prints and patterns, sheer tops and ponchos. Chico’s will add 65 to 75 new stores to an existing 449.
White House/Black Market, unlike Chico’s stores, a vertical operation that manufacturers all product, also carries some outside vendors. But sourcing has been strengthened through Chico’s international clout, vendor partnerships and savvy logistics, which White House/Black Market can now mine, said Patricia Darrow Smith, executive vice president and chief merchandising officer. This year, White House/Black Market will standardize fit in its private brands, which should boost sales, and continue to carry outside lines as well, to stay on top of trends. But the chain is cagey about citing vendors and outlining future sourcing strategies.
Though the Chico’s and White House/Black Market customer age demographic overlaps somewhat, White House/Black Market offers a more contemporary, body-conscious look in its all black-and-white product.
Soma, after opening in August during the Florida hurricanes, “could be a $4 billion to $5 billion opportunity, and it’s a business to build for the millennium,” said Chuck Nesbit, senior vice president, strategic planning and business development.