Chico’s FAS to be taken private by Sycamore Partners in $1 billion deal, sending stock up 63%

“Through this investment, we are gaining additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands: Chico’s, White House Black Market and Soma,” Chico’s CEO Molly Langenstein said in a statement.

The deal is expected to close by the end of the first quarter of 2024. It includes a 30-day “go-shop” period, during which time Chico’s can solicit other bids.

Once the deal is completed, Chico’s will operate as a private company and will no longer be listed on the New York Stock Exchange.

Chico’s second-quarter earnings released on Aug. 29 showed profit was ahead of consensus estimates but sales fell short. The company posted net income of $59.3 million, or 49 cents a share, up from $41.9 million, or 34 cents a share, in the year-earlier period. Adjusted per-share earnings came to 28 cents to beat the 27 cent FactSet consensus.

Sales fell to$545.1 million from $558.7 million, below the $555.0 million FactSet consensus.

Chico’s was founded in 1983* on Sanibel Island, Fla. It operates three brands: the namesake Chico’s, White House Black Market and Soma. The company had 1,258 stores in the U.S. as of July 29, and 58 international franchise locations in Mexico, along with e-commerce sites.

The stock has fallen 6.3% in the year to date, while the S&P 500
SPX
has gained 11%.

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*An earlier version of this report had a typo in the year the company was founded. It has been corrected.