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Chico's FAS To Close At Least 250 Stores In U.S. Over Three-year Period

Chico's FAS Inc. (CHS) said that it has made the strategic decision to rebalance the mix between its physical store presence with its digital network and to close at least 250 stores in the U.S. over a three-year period. The company updated its outlook for the fiscal 2018 fourth quarter ending February 2, 2019.

Total company fourth quarter net sales and comparable sales are trending better than its previous outlook.

Specifically, by brand, fourth quarter comparable sales for Chico's are trending in line with expectations. The company continues to implement its performance improvement plan for the Chico's brand, and is putting guidelines in place so that future product offerings, marketing and assortment architecture are aligned for all customers who shop the Chico's brand.

In addition, White House Black Market comparable sales are trending better than expectations, and Soma is strong with sales trending well above expectations.

The company anticipates a low double-digit decline in net sales compared to its previous expectation for a mid-teen decline, which includes the negative impact of the 53rd week of $29 million in fiscal 2017, and a mid-single digit decline in consolidated comparable sales, versus its previous outlook for a high single-digit decline in consolidated comparable sales.

Chico's FAS announced strategic initiatives to build on the Company's omnichannel platform. These initiatives include a retail fleet optimization plan and an expanded review of the Company's operations.

The company has made significant progress in developing an integrated omnichannel platform with advanced capabilities to modernize, digitize and personalize the customer experience.

The Company has also forged key partnerships with ShopRunner, Amazon and QVC. As a result, the Company now has the technology and tools in place to capture and stay connected with its eight million customers in new ways, whether in-store, online or virtually, and to fully activate its omnichannel strategy.

As such, the Company has made the strategic decision to rebalance the mix between its physical store presence with its digital network and to close at least 250 stores in the U.S. over a three-year period. This will allow the Company to take advantage of its lease expiration cadence, while improving profitability and return on invested capital. Closings will be across the three brands and weighted to years two and three.

The company said it has commenced a comprehensive review of its operations . With constantly changing customer needs and shopping patterns, the Company is committed to enhancing its effectiveness and efficiency to better meet expectations and drive profitable growth.

The company said it will release its full fourth quarter and fiscal 2018 results on March 6, 2019.

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