Chico’s misses on Q2 sales and profit; taps beauty exec as Soma president
Chico's FAS' profit and revenue declined in the second quarter amid same-store declines across all its banners.
The women's apparel retailer also named Mary van Praag as president of Soma, effective September 5, 2017. She most recently served as CEO of Perricone MD. Prior to that, she held senior executive roles at Coty, and Johnson & Johnson's beauty division.
Chico's earnings declined to $22.72 million, or 18 cents per share, in the quarter ended July 30, from $23.04 million, or 17 cents per share in the year-earlier period. Analysts had estimated earnings of 20 cents per share.
Revenue declined 9% to $578.6 million from $635.7 million, compared with forecasts of $578.7 million. Total same-store sales fell 8.4%, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 10.6% at Soma, 9% at Chico's and 1.8% at Soma.
“Second-quarter sales were disappointing, and we are taking decisive actions to adjust our assortments and enhance omnichannel capabilities in bellwether categories such as jackets at Chico's and dresses at White House | Black Market," stated Shelley Broader, CEO and president, Chico's FAS. "While it is early in the third quarter, these key categories are showing encouraging progress. Our leadership team also continues to be keenly focused on driving our strategic priorities to transform Chico's FAS, Inc. into a more nimble, efficient and innovative retailer that continues to drive strong free cash flow in the long term.”
At the end of the quarter, inventories totaled $235.2 million, compared to $235.6 million in the year-ago period. Inventories included a $16.9 million increase compared to the prior year due to a change in shipping terms with a supplier. Excluding the impact of the change in shipping terms, inventory decreased 7.4%.
As of July 29, 2017, the company operated 1,482 stores in the U.S. and Canada under the Chico's, White House | Black Market and Soma banners.
Amazon uses Whole Foods to bolster its private-label portfolio
Amazon is wasting no time in leveraging its ownership of Whole Foods Market.
Amazon Fresh has made “hundreds" of new items from Whole Foods' house brands available online. Merchandise includes fancier fare and bath products from Whole Foods Market, staples from 365 Everyday Value, and pet foods from Whole Paws, according to CNBC.
The swift addition of the natural grocer’s lines significantly bolster Amazon’s increasingly aggressive expansion into private-label categories. The company already features 19 company-owned brands, all exclusively available on Amazon. These lines span men’s, women’s and children’s apparel, men’s shoes, cosmetics, tools, tech accessories, fresh and frozen food, lingerie and underwear, baby goods, consumer goods, linens, spare parts and furniture.
The portfolio will soon increase further, based on at least 10 more trademarks in the works. These include household goods, leather goods, handbags, baby products, car products, makeup, motor homes and music services.
Home furnishings brand continues global expansion
West Elm brand is expanding in the U.K.
The retailer, a division of Williams-Sonoma, will open its second U.K. location, in the London suburb of Kingston-Upon-Thames in winter 2017. The two-story, 8,000-sq.-ft. store is on the ground floor of Bentalls Shopping Centre. The new location will open with the brand's holiday assortment, along with a signature mix of furniture and accessories, and Fair Trade Certified and handcrafted products.
It will also offer Williams-Sonoma's design consultation program, Design Crew, which pairs customers with experts who provide design services.
“We’ve had four successful years introducing ourselves to the U.K. through our Tottenham Court Road store, a strong e-commerce business and a thriving wholesale partnership with John Lewis, said West Elm president Alex Bellos. “Creating the best store experience and connecting with our surrounding community is rooted in West Elm’s values. We are excited to connect with local artists, makers and designers through our West Elm LOCAL program by offering them space to sell their wares and bringing our regular cadence of workshops, classes, and engaging events.”
West operates 102 retail stores in the United States, Australia, Canada and the U.K., ships internationally to customers around the world and has unaffiliated franchisees that operate stores in Mexico, the Middle East, Philippines and South Korea. In addition to home furnishings retail, West Elm operates West Elm Workspace in the commercial furnishings industry and announced its expansion into the travel and hospitality industry with the launch of West Elm Hotels. West Elm publishes the blog Front+Main and is part of an active community on Facebook, Instagram, Pinterest, Twitter and YouTube.