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TellTale from Chico’s / Soma TellTale from Chico’s / Soma TellTale from Chico’s / Soma TellTale from Chico’s / Soma

Added: Aug 2021
TellTale from Chico’s / Soma

Added: Apr 2019
TellTale from Chico’s / Soma

Added: Apr 2019
TellTale from Chico’s / Soma

Added: Apr 2019
TellTale from Chico’s / Soma

Added: Apr 2019

current news

Group Urges Changes At Soma Parent Company

(Filed Under Financial and General Interest News). An activist investor group that says it owns 2% of the outstanding shares in Soma parent company Chico’s FAS, wrote a letter to the board, pointing out that Soma, if considered as a separate entity, could be worth more than the entirety of the firm.

The implication is that the greatest shareholder value might be obtained by separating Soma from the company’s two other brands, Chico’s and White House Black Market.

The June 7th missive from Barington Capital Group urged a wide range of improvements including replacing board members. But the investment group did admit it favors the current Chico’s FAS CEO. “We are pleased with Molly Langenstein’s involvement with the company,” Barington’s James Mitarotonda wrote. “We see promise in her leadership.”

Pointing to valuations of competing brands and other market data, Mitarotonda argued “Soma is likely worth the company’s entire enterprise value,” or “approximately $350 million to $1.1 billion,” compared to Chico’s FAS’ current enterprise value of just $644 million. “We believe Soma’s value is not being fully reflected in the company’s enterprise value. It seems clear to us that the poor historical performance at the Chico’s and WHBM brands is detracting from Soma.”

Barington explained that “over the past two years, two upstart brands have completed funding rounds led by well-known venture investors at very attractive valuations. Specifically: ThirdLove, a direct-to-consumer intimates brand that caters to a wide variety of women’s shapes and sizes, completed a 2019 funding round at a valuation of $750 million or 6x its run rate revenue of $125 million.”

It added that “Savage x Fenty, a digitally-native, fashion-oriented lingerie and sleepwear brand founded by singer and designer Rihanna, was valued at $1.0 billion in its 2021 funding round.”

Mitarotonda argued that Chico’s FAS “has significantly underperformed its peers and the market as a whole over the past 3, 5 and 10 year periods.” He suggested the company refresh the board, by adding “directors with relevant experience in the areas of digital commerce, merchandising and marketing and women’s fashion specialty retail,” adding, “we recommend that the company provide full segment detail for its brands, including gross profit, operating income, depreciation and amortization and capital expenditures. We believe the added disclosure will help investors to better assess the financial performance and relative valuation of each brand.” — NM

more Financial and General Interest News >>

Published 06-09-2021 by Nick Monjo

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