Shop Talk
Retailers, consumers and prices
Chico’s sexes it up a little
Who says people have to dress frumpy or dowdy in a recession?
Apparently not Chico’s FAS. The mature women’s chain, which operates Chico’s, White House/Black Market and Soma Intimates chains, has made major strides in making its merchandise more fashionable in the past year, and has been rewarded with stellar results in the third quarter and shares that are up eightfold in the last year.
The move towards trendier– dare we say, sexier – clothes helped sales this autumn rise 13.3 percent and allowed the chain to win market share while rivals such as Talbots and Clearwater Coldwater Creek continued to struggle. (A year and a half ago, U.S. gold medalist Michael Phelps’ mother Debbie boasted that her Olympics’ wardrobe at the Beijing Games came from Chico’s.)
Chico’s took advantage of Vogue editor Anna Wintour’s glamorous “Fashion Night Out” this fall to open a store in Manhattan’s SoHo district. And last year, the chain won national attention in 2008 when First Lady Michelle Obama wore a dress from a White House/Black Market store during on an appearance on the talk show “The View.”
The firm is apparently not done with its makeover: it is planning to open about 40 new locations of its lingerie chain Soma Intimates in 2010 and offer more risqué items, Chief Executive Officer David Dyer hinted on a call to analysts on Wednesday.
“We’re making great strides in our merchandise assortment for Soma, not only through our Soma touch and Soma solutions, but we’re also adding a layer of sensual, sexy merchandise that will infuse emotion and excitement back in the brand,” Dyer said.
But he left what, exactly, those new sexy products are to our imagination.
Check Out Line: Apparel sales shrinking with economy
Check Out what the shrinking U.S. economy is doing to apparel sales.
The Paris-based Organization for Economic Cooperation and Development says the U.S. economy has probably slipped into a recession that will last through the middle of 2009.
But forget Paris, you don’t need to look any further than today’s results from apparel retailers for proof that the U.S. economy is in a slide.
Two retailers that cater to women over the age of 35, Talbots Inc and Chico’s FAS, each saw sales at established stores fall more than 13 percent in the latest quarter.
Third-quarter net profit at Chico’s, which also operates White House Black Market stores, withered to $2 million from $23.6 million a year earlier as mark-downs also pounded profits.
Talbots, which specializes in classic looks, saw its loss from continuing operations expand to $14.8 million from less than a million in the year-earlier third-quarter.
Elsewhere, Charming Shoppes, which sells plus-size clothing for women, had a bit of good news. It reported a smaller-than-expected loss, but said it expects a wider loss for the holiday quarter.
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