Women's apparel retailer Chico's to shut 120 stores by 2017

Women's apparel retailer Chico's to shut 120 stores by 2017

Women's apparel retailer Chico's FAS Inc said it would shut about 120 stores by 2017 and open fewer this year than last, two days after the Wall Street Journal reported that a private equity firm had dropped its attempt to buy the company.

Chico's, struggling to compete against retailers such as Inditex SA, H&M and Forever 21, also said it had laid off about 240 head office and field management staff. Chico's announced that it would spend US$ 250 million to buy its own shares in the current quarter. The retailer, which sells mainly private-label casual clothing and accessories to older professional women, said it would cut capital spending to about US$ 100 million this year, a drop of about 29% from the three-year average.

Chico's said it would close about 35 stores this fiscal year ending January 31, 2016 and open about 40. The company, which operates 1,547 stores in the United States and Canada, opened 109 stores last year. Private equity firm Sycamore Partners pulled out of talks to buy Chicos after failing to secure financing on acceptable terms, according to media reports. Chico's reported a fourth-quarter net loss of US$ 31.8 million. The company lost US$ 348,000 in the same period last year. Revenue rose 7.6% to US$ 656.9 million.