Chico’s Plans to Go Private for $1 Billion

Chico’s FAS Inc. (Fort Myers, Fla.) said it has entered into a definitive agreement to be acquired by Sycamore Partners, a private equity firm specializing in retail, consumer and distribution-related investments. Upon completion of the deal, Chico’s FAS will be privately held.

Under the terms of the agreement, Chico’s FAS shareholders will receive $7.60 per share in cash. That represents a 65 percent premium over its closing stock price on Sept. 27 (the last trading day prior to the announcement of the transaction).

“Through this investment, we are gaining additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands: Chico’s, White House Black Market and Soma,” said Molly Langenstein, Chico’s FAS CEO and President. “Sycamore Partners has an outstanding record in the retail industry in partnering with management teams to help businesses reach even greater levels of success. They share 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.”

“We have long admired the company’s three iconic brands,” said Stefan Kaluzny, Managing Director of Sycamore Partners, whose other retail holdings include KnitWell Group, which consists of the Ann Taylor, LOFT and Talbots brands, Staples, Hot Topic, The Limited and Express. “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 transaction, which was approved unanimously by Chico’s FAS’s board, is expected to close by the end of the first quarter of 2024, subject to customary closing conditions and approvals, including approval by Chico’s FAS shareholders and expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The definitive agreement also includes a 30-day “go-shop” period, which permits Chico’s FAS and its financial advisor to actively solicit and consider alternative acquisition proposals.

The company’s three brands currently operate a total of 1258 stores in the U.S. and sell merchandise through 58 international franchise locations in Mexico and through two domestic franchise locations in airports.