Sycamore Buying Chico’s for $1 Billion
The retail-focused private equity firm is paying a 65 percent premium for the specialty retailer.
Sycamore Partners is continuing its push to consolidate in retail, scooping up Chico’s FAS Inc. with a $1 billion deal.
The private equity firm agreed to pay $7.60 a share to take the 1,258-door retailer private, a 65 percent premium over the Chico’s closing price on Wednesday.
The deal is expected to close by the end of the first quarter next year and will put the Chico’s, White House Black Market and Soma banners under Sycamore’s umbrella.
Molly Langenstein, Chico’s chief executive officer and president, said Sycamore shared “our commitment to providing solutions, building communities and creating memorable experiences to bring women confidence and joy. We look forward to working with the Sycamore Partners team to unlock Chico’s FAS’s full potential.”
Chico’s chairman, Kevin Mansell, added that: “The transaction reflects the board’s commitment to maximizing shareholder value. It provides Chico’s FAS shareholders with significant immediate cash value and creates exciting opportunities for employees of the company and our brands.”
Sycamore has a long history of dealmaking in fashion and retail, having previously cut deals for Ann Taylor, Lane Bryant, The Limited, Belk, Hot Topic, Talbots, Torrid, Coldwater Creek, Jones New York, Stuart Weitzman and more.
Some brands have moved on, like Stuart Weitzman, which is now part of Tapestry Inc. Some have gone bankrupt, like Belk. Some have gone public, like Torrid. And some are being reworked under Sycamore, which recently formed KnitWell Group to hold Ann Taylor, Loft and Talbots.
Stefan Kaluzny, managing director of Sycamore, said: “We are pleased to have reached this agreement with Chico’s FAS and its board of directors. We have long admired the company’s three iconic brands, including Chico’s, White House Black Market and Soma. We look forward to partnering with the company’s more than 14,000 talented associates to grow these brands by continuing to deliver excellent products and service to their devoted customers.”
The deal includes a 30-day go-shop period, giving Chico’s and its financial advisor Solomon Partners time to play the field and attract a better offer from another buyer.