(Filed Under Financial and General Interest News). Sales at Soma Intimates were up 13.7% for the fourth quarter of 2014 and 8% for the 52 weeks ended January 31, 2015, rising to a record total of $311.2 million for the year.
But despite Soma’s “23rd consecutive quarter of positive comps,” a newly cautious management has decided to open only “12 stores to 14 stores” in 2015 as compared to the “19 to 22” Soma shops it said, just last December, it was planning to open this year.
Meanwhile, parent company Chico’s FAS registered income of $64.6 million on sales of $2.675 billion compared to $65.9 on lower sales of $2.586 billion for the 52 weeks ended February 1, 2014. Other company divisions include White House | Black Market and Boston Proper.
The earnings release came just after it was reported that Sycamore Partners (see separate story) had dropped its attempts to acquire Chico’s.
Overall, Chico’s said it is planning to bring “Capital expenditures in fiscal 2015 down 29% from 3-year average, with reduced pace of store openings in 2015 and beyond” and it also announced “organizational realignment reducing corporate headcount by 12%.” David Dyer, president and CEO explained, “The actions we have taken delivered positive comparable sales across all brands, an increase in gross margin dollars and lower inventory levels. While the overall apparel retail environment remains challenging, we expect the new capital allocation and cost reduction initiatives announced today will further strengthen Chico’s FAS and its brands.”
Despite the more conservative plans, Chico’s SVP Todd Vogensen claimed during the conference call to discuss the 2014 results, “we still believe in Soma’s store growth. We’re still planning to see a healthy amount of that. And while you may see more overall reduction in store count as we go forward, Soma is clearly a focus for us.” He added that when it comes to store closings, the corporation is “mostly focused on Chico’s and White House” locations rather than Soma. Dyer confirmed that sentiment during the call stating, “obviously, we see as we move forward, we think Soma has a lot more room for greater store expansion than some of our larger brands.” Neither mentioned eventual plans for “600 plus” Soma stores, something executives had discussed during the last conference call.
Up until now Soma has been growing rapidly. As of November 1, 2014 there were 263 Soma full price stores and 17 Soma outlet stores. There were 209 at the end of 2012, 181 at the end of 2011 and only 128 at the end of 2010.
The conference call at the end of February revealed other details about Chico’s lingerie division. According to Dyer, “Soma, unlike our other brands, actually has a fourth quarter business. It is the largest quarter of their year, is the fourth quarter. I think that when you looked at our sleepwear this year, it was beautiful. Sleepwear and loungewear always drives sales in the fourth quarter. Our assortments were right on. They were pretty.”
Finally, it might not be anything, but a possible sign that the company is changing its focus to a slightly younger customer came in the most recent investor “corporate profile” which states that “Chico’s FAS, Inc. is a cultivator of brands serving the lifestyle needs of fashion-savvy women 30 years and older.” But just last December, in the conference call to discuss the third quarter 2014 results, Dyer boasted, “Soma continues to strengthen its position as the bra destination for women 35 and over.”
The complete conference call can be found here: http://seekingalpha.com/article/2954186-chicos-fas-chs-david-f-dyer-on-q4-2014-results-earnings-call-transcript?page=1
Disclaimer: The views expressed in comments published on bodymagazine.us are those of the comment writers alone. They do not represent the views or opinions of Bodymagazine or its staff.
NOTE: Your Email will not be displayed.