Chico’s 3Q Profits Dive; Signs $55 Million Credit Deal
Fort Myers, Fla. Chico’s FAS Inc. said Tuesday its third-quarter profit plunged as a weak economy hurt sales. The company earned $2 million down from $23.6 million in the year-ago quarter. The results reflected the harsh environment that apparel retailers face going into the holiday selling season.
Sales fell 5% to $394.2 million from $415.9 million. Same-store sales declined 13.4% across the company, with a 17% drop at Chico’s namesake brand and a 5% drop at its White House | Black Market stores.
“We believe our third-quarter operating results are reflective of the poor economy and consumers declining confidence,” chief executive Scott Edmonds said in a statement.
He said the company remains focused on conserving cash by reducing costs. During the third quarter Chico’s opened 13 new stores and closed five stores, while expanding or relocating six stores. During the fourth quarter, Chico’s expects to close between five and seven stores, while expanding or relocating between one and three stores.
In other news, Chico’s said it signed a $55 million credit deal with SunTrust Bank.
The credit line is a $10 million boost from the company’s prior agreement and has a $45 million accordion feature for debt capacity. The agreement will expire in Nov. 2011.
“Securing this new facility in these uncertain economic times is a testament to our financial strength,” Edmonds said.
The company’s balance sheet includes $256 million in cash and marketable securities and no debt, he said. Chico’s has no plans to draw on the new credit line.
Dillard’s to lay off 500 associates
LITTLE ROCK, Ark. Dillard’s announced a strategic staff reduction of approximately 500 associates as part of its ongoing efforts to reduce operating expenses.
The work force reduction includes approximately 60 associates in Little Rock, Arkansas. Dillard’s employs approximately 60,000 associates nationwide and approximately 2,400 in the Little Rock area.
Dillard’s third-quarter sales for the 13 weeks ended Nov. 1, were $1.48, a 10% decrease from $1.63 billion in 2007. Comparable-store sales decreased 9%.
Best Buy launches holiday microsite
MINNEAPOLIS Best Buy has announced the launch of it’s new holiday microsite at www.AskABlueShirt.com. The site features interactive applications such as a Digital Note to Santa to “Hot Gift” and “Holiday Traditions” blog posts.
Best Buy BlueShirt technology Pros and Geek Squad agents are contributing posts based on consumer questions they are hearing in the stores – with topics ranging from new trends in photo sharing and accessorizing your iPhone to staying virtually connected to friends and family. In addition, a Holiday Wiki was developed as a portal to collect consumers’ favorite holiday traditions. BlueShirt bloggers will add tips on incorporating the latest in consumer electronics to those holiday rituals.
“We know consumers are looking for holiday gift giving advice and ways to engage with others across the country”, said Greg Johnson, senior vp of marketing for Best Buy. “The new holiday microsite is a fun way to not only share our knowledge and perspective, but to also learn what unique holiday traditions our customers engage in to make the holiday season even more enjoyable.”