Chico's to close 35 stores this year, 120 locations by 2017

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Florida-based Chico's to close 35 stores this year, 120 locations by 2017

By Associated Press Thu, Feb 26, 2015 @ 12:15 pm | updated Thu, Feb 26, 2015 @ 12:57 pm

FT. MYERS, Fla. â€" Chico's will close dozens of stores this year, accelerate the shuttering of others and cut the work force at its Florida headquarters as it attempts to remake its retail brand.

The women's clothing store narrowed its losses in the fourth quarter and beat most profit expectations, sending shares higher Thursday.

Its comparable-stores sales also rose sharply.

The company expects to close 120 stores over the next two years, saving it some $55.2 million. About 35 of those stores will close this year.

About 240 jobs were eliminated, mostly store managers and workers at its Ft. Myers, Florida, headquarters. The job cuts will reduce costs by about $38 million a year. The company booked an $8.2 million restructuring charge in the fourth quarter related to the cuts.

Chico's had about 23,700 employees in 2014.

The Wall Street Journal reported this week that Sycamore Partners had failed to line up agreeable financing to take Chico's private and that the private equity firm had abandoned its takeover attempt. Shares fell 4 percent Wednesday, but bounded back more than 2 percent Thursday.

Chico's operates about 1,547 stores under Chico's, White House Black Market, Soma Intimates and Boston Proper, with most clients being established, professional women.

The company had a quarterly loss of $31.8 million, or 21 cents per share, compared with net income of $348,000 last year during the same period.

Yet earnings this quarter, adjusted for amortization costs and restructuring costs, were 5 cents per share, topping Wall Street projections by 3 cents, according to analysts surveyed by Zacks Investment Research.

Revenue rose almost 8 percent to $656.9 million, which also topped Street forecasts. Analysts expected $642.1 million, according to Zacks.

Same-store sales, a good barometer of a retailer's health, rose 4.3 percent during the quarter, compared with fall-off f 3.4 percent during the same period last year.

For the year, the company reported profit of $64.6 million, or 42 cents per share. Revenue was $2.68 billion.

Shares of Chico's FAS Inc. rose 45 cents to $17.82 in midday trading.