BOSTON — Chico’s FAS will shutter its fledgling Pazo junior store concept after the holidays to devote more resources to its new White House/Black Market chain, purchased at the end of July.
Chico’s had been trying to fix the Pazo concept, which has just 10 stores and never met expectations. It was launched last March.
“We wanted to focus our efforts on areas with greater potential for growth,” explained a spokeswoman for the Fort Meyers, Fla.-based Chico’s.
The spokeswoman said the company is considering converting the real estate to Chico’s, which has 396 misses’ units, or White House/Black Market, which has 107 stores. It’s also possible that some former Pazo spaces test a misses’ activewear and intimates concept geared toward the Chico’s customer and slated to bow in fall 2004, as previously reported.
Elizabeth Pierce, analyst with Sanders Morris Harris, applauded Chico’s move to leave the over-grazed world of junior specialty retailing for greener pastures. In her research notes this week, she reiterated a “strong buy” rating on the stock.
“Pazo product was well-made and it was trend right, but there was no clear message on why to shop there,” she noted. “It’s really tough to take that girl from shopping elsewhere.”
In contrast, White House/Black Market has a clearly defined niche, carrying black clothing on one side of its store and white on the other. The concept could grow comfortably to a 400-store chain, Pierce predicted.
Sales per square foot average about $550, a very respectable number that Pierce believes Chico’s management could enhance further with a more comprehensive accessories business.
“They’re experts with novelty,” she said. “Accessories are a great up-sell and they have a great margin.”