| Research Note: Chico’s (CHS) – Feb 15, 2012 |
StoreIntel |
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- We recently completed a reveiw of several Chico’s locations in multiple states on the East coast and have a very favorable review of their current assortments. We feel the product is very conclusive to the “polished casual” look that fits the average over-35 year old woman’s lifestyle. The true definition of polished casual is apparel that fits a woman for both work and play, but it’s more appropriate for today’s working woman and a clear step above a denim bottoms outfit.
- We are very comfortable with Chico’s pricing strategy with respect to the price range in each category. Most tops are priced at $59 to $89, bottoms from $69 to $89, sweaters $79 to $139 and jackets/blazers up to $199 – ranges are comparable to Coldwater Creek, Talbots and Ann Taylor. The collections have a softer feel and very sweater driven with current trends such as open-weave crochet an important example of being on trend with great value.
- We are very supportive of their approach to floor sets, with small collections all with unique color stories and styling, but yet done in a manner which is catered more to a separate presentation as opposed to a collection that we see more prevalent at stores like Ann Taylor and Coldwater Creek.
- The third quarter earnings were severely hurt by their aggresive inventory position, which was a response to a very strong July and August. This approach proved to be costly as we witnessed a severe slowdown in the back half of September through October. Our research indicates that they seem to have cleared through a good portion of inventory without having to take too many additional markdowns. Based on our recent store visits, business has started off the first few weeks of 2012 strong.
- We also see no slowdown in the White House|Black Market business. Their product seems to be on trend and there is no change in our positive feeling on this strong division for Chico’s.
- In summary, we give this chain an 8 out of 10 with respect to their current assortments.
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