FORT MYERS, Fla., July 11, 2016 /PRNewswire/ -- Chico's FAS,
Inc. (NYSE:CHS) today announced that Institutional Shareholder
Services ("ISS"), a leading independent proxy advisory firm, has
recommended that Chico's FAS' shareholders vote "FOR" all
four of the Company's highly-qualified director nominees –
Shelley Broader, Bonnie Brooks, Janice
Fields and William "Bill" Simon – on the WHITE proxy
card in connection with the Company's 2016 Annual Meeting of
Shareholders to be held on July 21,
2016. ISS also recommended that shareholders vote
"FOR" the other proposals to be considered at the Annual
Meeting, including the advisory vote on executive compensation, the
declassification of the Chico's FAS Board of Directors and the
ratification of Ernst & Young as the Company's auditors.
In its July 8, 2016 report, ISS
recognized the positive, proactive change that has been underway at
Chico's FAS and concluded:1
"For more than a year the board
has been undertaking significant change in both the executive suite
and the boardroom, and directing operating and strategic changes
which are just beginning to have an effect on corporate financial
performance.
As the dissidents have not made a
compelling case that additional change at the board level is
warranted – and particularly because the strength of all four
management nominees suggests those nominees are likely the best
candidates to continue driving the necessary improvements in the
company's performance – votes on the White management card FOR
management nominees Broader, Brooks, Fields, and Simon are
warranted."
In commenting on the Company's financial performance and
recognizing that the Board of Directors and management team are
committed to top and bottom line improvement, ISS stated:
"The actions this board has taken
certainly appear to strike at the root cause of the issues at the
company: driving material cost savings, reducing capital
expenditure, better aligning resources with growth opportunities,
and focusing on other initiatives – like ROI on its marketing spend
– that can improve gross margins."
Regarding the two Chico's FAS nominees targeted by Barington and
rejecting Barington's red herring issue on Bonnie Brooks, ISS said:
"Bonnie
Brooks, who would also join the board if elected at this
annual meeting, brings significant, current retail experience –
including experience in mid- and high-end apparel – as well as
successful turnaround experience at three retailers."
"Janice
Fields, the newest incumbent on the board with a tenure of 3
years, adds relevant experience... Perhaps more critically, as
chair of the Nominating and Governance Committee she has been the
architect of its renewal, including replacing one long-tenured
director and the former CEO with two unusually well-qualified new
nominees – Brooks and Simon – whose skills and experience are
directly relevant to the new CEO's mandate."
ISS also recognized that the Chico's FAS Board has been
committed to proactive action to best serve the interests of
shareholders, strong corporate governance and world-class
leadership, including a refreshed Board, noting:
"there is a clear track record of
the board taking matters into its own hands long before the proxy
contest began – including significantly refreshing its own ranks
with new directors bringing clearly relevant experience, changing
its own leadership while maintaining an independent chairman,
changing the leadership of its executive team, and implementing
cost reduction initiatives in 2014 and 2015 even as all these other
changes were in process."
Commenting on the ISS recommendation, Chico's FAS issued the
following statement:
ISS's recommendation in support of
ALL FOUR of the Board's nominees reaffirms what we have said all
along – Shelley Broader,
Bonnie Brooks, Janice Fields and Bill
Simon are the best qualified director candidates for Chico's
FAS and have the skills and experience needed to support the
Company's success and drive shareholder value in today's
competitive retail environment.
As ISS recognizes, positive change
has been underway for some time at Chico's FAS, and now, under the
direction of our new Chief Executive Officer and President,
Shelley Broader, we are successfully
executing on a new strategic plan and have made numerous positive
changes across the Company – in strategy, management, operations,
finance and governance – with more to come.
Like ISS, many shareholders and
analysts have also applauded the significant progress we are
making, which confirms our conviction that Chico's FAS is on the
right path to profitable growth and value creation for all Chico's
FAS shareholders.
We believe that replacing any one
of the Board's superior director nominees with either of
Barington's less qualified candidates would leave us without
relevant and current skills and experience that is critical to
supporting continued success under Ms. Broader's new plan.
Indeed, while ISS recognized that each Barington nominee had
some relevant experience, it observed that each lacked important
experience, whether turnaround and extensive international global
experience in the case of Ms. Grove, or executive retail experience
in the case of Mr. Mitarotonda, already well represented in the
Company's nominees.
Furthermore, Barington is not a
long-term investor in Chico's FAS and thus in our view would not
credibly represent the interests of Chico's FAS shareholders in the
boardroom. Barington and its affiliates currently own approximately
0.92% of the Company's outstanding shares and own derivatives
potentially convertible into another approximately 850,000 shares
or 0.64% of the Company's outstanding shares. The majority of
such derivatives were purchased within the past six months and at
least 650,000 of them are out-of-the-money call options.
We are confident that we are on
the right track and with the right team and strategic plan to usher
in a new era of profitable growth and value creation for all
Chico's FAS shareholders. We urge shareholders to protect the
value of their investment and disregard Barington's self-serving
campaign by voting "FOR" the Chico's FAS director nominees
on the WHITE proxy card.
Chico's FAS reminds shareholders that every vote is important,
no matter how many or how few shares it represents. The
Company urges all shareholders to use the WHITE proxy card to vote
"FOR" the Company's four director nominees TODAY.
Shareholders who inadvertently submitted a Blue proxy have
every legal right to change their vote, as only the latest-dated
proxy counts.
Chico's FAS shareholders who have questions or require
assistance with voting their shares, may 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.