FORT MYERS, Fla., June 24, 2016 /PRNewswire/ -- Chico's FAS, Inc.
(NYSE: CHS), in connection with its Annual Meeting of Shareholders
to be held on July 21, 2016, today
mailed a letter to shareholders and posted a video featuring
Shelley Broader, the Company's Chief
Executive and President, on the Company's website. The video
is available at www.chicosfas.com under the "Quick Links" heading
and in the "Investor Overview" section. In the video, Ms.
Broader discusses the progress the Company is making and the
unanimous recommendation of the Chico's FAS Board of Directors to
vote on the WHITE proxy card "FOR" the Board's four
world-class nominees – Shelley
Broader, Bonnie Brooks,
Janice Fields and William "Bill"
Simon.
Highlights from the letter include:
- Positive changes have been made across Chico's FAS – in
strategy, management, operations, finance and governance – with
more to come.
- Numerous independent industry analysts have applauded:
- Ms. Broader's strong leadership, experience and fresh
perspective;
- Ms. Broader's new focus areas and the changes Chico's FAS is
making; and
- The benefits of Ms. Broader's actions on the Company's
performance and value creation for shareholders.
- Chico's FAS' world-class director nominees have the experience
needed to support Ms. Broader's new strategic plan and value
creation.
- Barington's suggestions, including its nominees, show a
fundamental misunderstanding of specialty apparel and Chico's
FAS.
The full text of the letter being mailed to shareholders
follows:
SUPPORT PROGRESS AND VALUE CREATION –
VOTE "FOR" ON THE WHITE PROXY CARD TODAY
June 24, 2016
Dear Fellow Shareholder:
Earlier this year, Shelley
Broader, our new Chief Executive Officer and President,
announced a new plan with four focus areas for Chico's FAS. I
am pleased to report that we are successfully executing on that
plan and have made numerous positive changes across the Company –
in strategy, management, operations, finance and governance – with
more to come.
Individually, these changes are important.
Taken together, they are significant indicators that demonstrate
that your company is on the right path to profitable growth and
value creation for all Chico's FAS shareholders. Your Board
of Directors unanimously believes Ms. Broader should be allowed the
opportunity to continue the progress we are making. A video
featuring Ms. Broader discussing this progress is available at
www.chicosfas.com under the "Quick Links" heading and in the
"Investor Overview" section.
Notably, we have talked with numerous shareholders
who support the actions we are taking and who share our confidence
in the future of Chico's FAS. Importantly, independent
industry analysts are equally supportive, as summarized below.
INDEPENDENT INDUSTRY ANALYSTS HAVE APPLAUDED
MS. BROADER'S
STRONG LEADERSHIP, EXPERIENCE AND FRESH
PERSPECTIVE1…
"Ms. Broader brings impressive retail leadership
experience to the table. We believe the company made a solid choice
in hiring Ms. Broader who comes to CHS with over 25 years of
experience leading global and regional retail businesses." SunTrust
Robinson Humphrey, 28 October
2015
"We believe Ms. Broader will bring a
differentiated skill set to the Chico's organization; she will
bring a fresh eye to running an apparel retailer and will likely
use her operational expertise to improve the company's speed to
market." Stifel, 28 October 2015
…ARE SUPPORTIVE OF MS. BROADER'S NEW FOCUS
AREAS AND THE CHANGES
WE ARE MAKING…
"Discipline & Product Innovation on Deck For
2016" Piper Jaffray, 25 February 2016
"Importantly, we are encouraged by new CEO
Broader's focus on strengthening the retail/digital channels and
core brands while leveraging CRM data to improve customer
engagement. We expect operational discipline around inventory and
cost control to complement sales and drive longer-term margin
recovery." Mizuho, 25 February
2016
"New CEO Impressive, Maintain Belief CHS is
Best-in-Class…we believe the new CEO not only brings a wealth of
experience to the table but also recognizes the need to quickly
address the 'seismic' shift taking place at retail, both of which
we expect will be instrumental in driving operating margins back to
the DD levels." Brean Capital, 26 February
2016
…AND RECOGNIZE THE BENEFITS OF OUR ACTIONS ON
THE COMPANY'S
PERFORMANCE AND VALUE CREATION FOR OUR SHAREHOLDERS
"We believe the company's leadership in
omni-channel (strive for all-inclusive experience with
brands--devices, channels, products, etc.) aligns well with its
strategic vision of building strong customer relationships,
customer service, and a seamless customer experience. We view its
focus on customer service and personalization as a differentiator
that is difficult to replicate and a key to long-term margin
expansion and profitability." FBR & Co., 26 April 2016
"New CEO beginning to make her mark. New CEO
Shelley Broader's decision to
decentralize marketing fits in with her key areas of focus;
shifting the marketing function to the brand level should
strengthen each brand's position. It will also remove a layer and
reduce expenses." Citi, 27 April
2016
"We are impressed by the breadth of opportunity to
rightsize the cost structure and improve operations, as identified
by new CEO Shelley Broader. While
comps could take a long time to turn, she is going after what can
be controlled and improved, and isn't wasting any time." MKM
Partners, 26 May 2016
"We think CHS management is proactively making the
right strategic decisions for the financial health of the business
as well as shareholder returns." Morgan Stanley, 26 May 2016
"We remain impressed with new CEO Shelley Broader and are encouraged by the new
$50-70M cost-cutting initiative
announcement and recent hires (Chief Human Resources Officer and
General Counsel)." SunTrust Robinson Humphrey, 27 May 2016
"Enhanced discipline should drive better
results…Our recent meetings with CFO Todd
Vogensen and IR Jennifer Powers reinforced that new CEO
Shelly Broader's plan to reduce
expenses through supply chain and advertising efficiencies can be
done without disrupting merchandising." KeyBanc, 19 June 2016
CHICO'S FAS' WORLD-CLASS DIRECTOR NOMINEES
HAVE THE EXPERIENCE
NEEDED TO SUPPORT MS. BROADER'S NEW PLAN AND VALUE CREATION
The Chico's FAS director nominees are world-class
and eminently qualified. Individually, they bring unique
skills and collectively, they have the expertise most relevant to
advance Ms. Broader's new strategic plan and our success in today's
dynamic, competitive retail environment.
- Shelley Broader: Chico's
FAS' new CEO and President. Architect of the Company's new focus
areas and leading the progress underway.
- Bonnie Brooks:
Substantial, current retail, merchandising, digital and turnaround
expertise and strong track record across several leading global
apparel retailers.
- Janice Fields: One of the
Company's newest independent directors. Has made important
governance and leadership contributions to Chico's FAS as Chair of
the Corporate Governance and Nominating Committee. Proven track
record in consumer marketing and brand building, multi-unit real
estate and franchising.
- William "Bill" Simon: Extensive supply chain expertise
and a proven track record leading large, complex global retailers
with best-in-class cost structures.
We believe electing either of Barington's
nominees would harm shareholder value and the significant progress
we are making: Barington has failed to demonstrate any
ideas, vision or expertise that would warrant election of its
nominees. Neither of Barington's candidates can match the
unique and relevant skill-sets provided by each of the Company's
superior director nominees. Further, as shown in the table
below, replacing any one of the Board's director nominees with
either of Barington's candidates would leave us without relevant
and current skills and experience that we believe is critical to
supporting continued success under Ms. Broader's new plan.
Critical Skills and
Expertise Categories:
|
Jim
Mitarotonda
|
Janet
Grove
|
Current Retail /
Merchandising
|
No
|
No
|
Digital
|
No
|
No
|
Executive Level
Consumer
Marketing / Brand Building
|
No
|
Yes
|
Operational Cost
Cutting
|
No
|
No
|
Supply
Chain
|
No
|
Yes
|
Multi-unit Real
Estate
|
No
|
Yes
|
BARINGTON'S SUGGESTIONS, INCLUDING ITS
NOMINEES, SHOW A
FUNDAMENTAL MISUNDERSTANDING OF SPECIALTY APPAREL AND CHICO'S
FAS
Despite the overwhelming support Chico's FAS has received and
the superior skill-set provided by your Board's director nominees,
Barington has launched a hostile proxy campaign based on misguided
suggestions. We believe Barington's unwarranted campaign
underscores that Barington just doesn't "get" Chico's FAS or the
current environment in specialty retail. For example:
- Barington's 200 to 300 bricks & mortar store growth
strategy conflicts with the way many consumers are shopping
today, particularly at Soma. In fact, Chico's FAS customers,
like those of many retailers, are engaging with our brands at a
faster rate on digital channels than in-store.
- Barington's suggested cost reductions disregard actions we
have already taken. Notably, Barington's estimates for
advertising costs include Boston Proper, and since the Company sold
that business last year, the Company has already exceeded the
reduction in advertising costs that Barington targets. Further,
Barington's estimates ignore the $10 million
to $20 million of non-merchandise procurement savings that
we have already identified and announced.
- The level of cuts suggested by Barington risks harming the
very brand differentiators that have supported our success and that
Barington has applauded. Unlike those proposed by Barington,
Chico's FAS' operating improvements are carefully structured to
drive savings without compromising the outstanding customer service
that has long differentiated our brands and fostered customer
loyalty.
- Barington's hand-picked director nominees lack current,
relevant experience that would support our progress and new
plan. Janet Grove's retail
experience is so outdated that she has NO experience in digital,
which is a primary growth avenue for Chico's FAS and almost every
retailer today. Jim Mitarotonda has
served on only one apparel retail Board and that company was sold
just months after he joined; any other experience he provides is
duplicative with that already represented by current Chico's FAS
directors or our new independent director nominees.
VOTE "FOR" ON THE WHITE PROXY CARD TO SUPPORT
THE COMPANY'S
PROGRESS ON ITS STRATEGIC PLAN AND THE VALUE OF YOUR
INVESTMENT
We are excited by the changes underway at Chico's
FAS as part of Ms. Broader's strategic plan and are confident in
the future of your company. We strongly believe that the
Board's four world-class nominees – Shelley
Broader, Bonnie Brooks,
Janice Fields and Bill Simon – are best qualified to ensure we
fully capitalize on our many strengths, improve performance and
create value for shareholders.
We urge you to protect the value of your
investment and disregard Barington's self-serving campaign.
We advise you to simply discard any Blue proxy card that you may
receive from Barington. Instead, please use the enclosed
WHITE proxy card to vote "FOR" your Board's nominees TODAY – by
telephone, by Internet, or by signing, dating and returning the
WHITE proxy card in the postage-paid envelope provided.
On behalf of your Board of Directors, we thank you
for your continued support.
Sincerely,
/s/ David. F. Walker
David F.
Walker
Chair of the Chico's FAS
Board
If you have any
questions or require any assistance with voting your shares,
please contact the Company's proxy solicitor:
Innisfree M&A
Incorporated
Toll-free at (877)
825-8971 (from the U.S. or Canada)
or
(412) 232-3651 (from
other locations)
|
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House Black
Market, and Soma is a leading omni-channel specialty retailer of
women's private branded, sophisticated, casual-to-dressy clothing,
intimates, complementary accessories, and other non-clothing
items.
As of April 30, 2016, the Company
operated 1,517 stores in the US and Canada and sold merchandise through franchise
locations in Mexico. The Company's
merchandise is also available at www.chicos.com, www.whbm.com, and
www.soma.com. For more detailed information on Chico's FAS, Inc.,
please go to our corporate website at www.chicosfas.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain statements contained herein may contain certain
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which reflect our
current views with respect to certain events that could have an
effect on our future financial performance, including but without
limitation, statements regarding our plans, objectives, and future
success of our store concepts, the implementation of our previously
announced restructuring program, and implementation of our program
to increase the sales volume and profitability of our existing
brands through four previously announced focus areas. These
statements may address items such as future sales, gross margin
expectations, SG&A expectations, operating margin expectations,
planned store openings, closings and expansions, future comparable
sales, inventory levels, and future cash needs. These statements
relate to expectations concerning matters that are not historical
fact and may include the words or phrases such as "expects,"
"believes," "anticipates," "plans," "estimates,"
"approximately," "our planning assumptions," "future outlook," and
similar expressions. Except for historical information, matters
discussed in such oral and written statements are forward-looking
statements. These forward-looking statements are based largely on
information currently available to our management and on our
current expectations, assumptions, plans, estimates, judgments and
projections about our business and our industry, and are subject to
various risks and uncertainties that could cause actual results to
differ materially from historical results or those currently
anticipated. Although we believe our expectations are based on
reasonable estimates and assumptions, they are not guarantees of
performance and there are a number of known and unknown risks,
uncertainties, contingencies, and other factors (many of which are
outside our control) that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. Accordingly, there is no assurance that our
expectations will, in fact, occur or that our estimates or
assumptions will be correct, and we caution investors and all
others not to place undue reliance on such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, general economic and
business conditions, conditions in the specialty retail industry,
the availability of quality store sites, the ability to
successfully execute our business strategies, the ability to
achieve the results of our restructuring program, the ability to
achieve the results of our four focus areas, the integration of our
new management team, and those described in Item 1A, "Risk Factors"
and in the "Forward-Looking Statements" disclosure in Item 7.
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" of our Form 10-K. There can be no assurance
that the actual future results, performance, or achievements
expressed or implied by such forward-looking statements will occur.
Investors using forward-looking statements are encouraged to review
the Company's latest annual report on Form 10-K, its filings on
Form 10-Q, management's discussion and analysis in the Company's
latest annual report to stockholders, the Company's filings on Form
8-K, and other federal securities law filings for a description of
other important factors that may affect the Company's business,
results of operations and financial condition. All written or oral
forward-looking statements that are made or attributable to us are
expressly qualified in their entirety by this cautionary notice.
The Company does not undertake to publicly update or revise its
forward looking statements even if experience or future changes
make it clear that projected results expressed or implied in such
statements will not be realized.
Additional Information
Chico's FAS, its directors and certain of its executive officers
are participants in the solicitation of proxies from Company
shareholders in connection with the matters to be considered at the
Company's 2016 Annual Meeting. The Company has filed a definitive
proxy statement and WHITE proxy card with the U.S. Securities and
Exchange Commission (the "SEC") in connection with any such
solicitation of proxies from Company shareholders. COMPANY
SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE PROXY
STATEMENT AND ACCOMPANYING WHITE PROXY CARD AS THEY CONTAIN
IMPORTANT INFORMATION. Information regarding the identity of the
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the proxy statement and
other materials filed with the SEC. Shareholders can obtain
any proxy statement, any amendments or supplements to the proxy
statement and other documents filed by the Company with the SEC for
no charge at the SEC's website at www.sec.gov. Copies are
also available at no charge at the Company's website at
www.chicosfas.com, by writing to Chico's FAS at 11215 Metro
Parkway, Fort Myers, FL 33966, or
by calling the Company's proxy solicitor, Innisfree, toll-free at
(877) 825-8971.
Contacts:
Investors:
Jennifer Powers
Vice President - Investor
Relations
Chico's FAS, Inc.
(239) 346-4199
Arthur B. Crozier / Jennifer M. Shotwell / Jonathan E. Salzberger
Innisfree M&A Incorporated
(212) 750-5833
Media:
Barrett Golden / Leigh Parrish / Joseph
Sala
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
1 Permission to use quotations neither sought nor
obtained.
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SOURCE Chico's FAS, Inc.