Shares of Chico’s FAS Inc. are surging more than 17% in Tuesday trading after the retailer made public its plan to reopen stores as early as next week amid the coronavirus pandemic.
In a statement shared Monday night, president and CEO Bonnie Brooks announced that the company — which operates namesake chain Chico’s, as well as White House Black Market, Soma and TellTale — intends to open back up its outposts starting May 4.
Under the plan, which will roll out in three phases, Chico’s will first begin fulfilling national orders using existing inventory in stores. It will then offer buy online, pick-up in store services, including contactless curbside pickup, which give customers the option to shop without risking infection through interaction with others. Lastly, it will allow stores to reopen — consistent with local health and safety guidelines — under a new shop-by-appointment service.
“While today’s challenges are of a greater magnitude, our culture of agility and our ability to grow sales while reducing expenses — which started exactly 12 months ago — has already served us well during this period,” Brooks said, “and we are confident we have a path forward for the sustainable future of the company post-COVID-19.”
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As of Feb. 1, Chico’s operated 1,341 stores in the United States and Canada. Most of its stores are under 3,500 square feet and located in shopping centers. The smaller-sized boutiques, suggested its executive chief, affords associates the ability to manage the number of customers in stores at one time, provide hand sanitizer and masks as needed and adjust fitting rooms to encourage social distancing.
With its reopening plan, Chico’s has become one of the first chains to lay out detailed plans to emerge from lockdown after many states advised residents to stay at home to help prevent the spread of the novel coronavirus. On April 1, the company joined an expansive list of brands and retailers to place most of their employees on furlough and temporarily reduce pay for the remainder, including its executive leadership team and board of directors.
However, workers at its distribution center continued to receive wages as Chico’s e-commerce platforms remained fully operational. Over the past six weeks, the company said that its digital business has experienced double-digit growth — driven by the purchase of intimate apparel, as well as sleepwear and activewear. It also noted increased traffic and sales on its websites as well as more engagement on its social media channels.
“As the magnitude of the impact of COVID-19 on the women’s apparel industry became clearer, we immediately pivoted to a new business plan for 2020 and beyond, assessing and overhauling every function of our business, as well as quickly adjusting operations aligned to digital marketing and distribution,” added Brooks.
Amid the health crisis, Chico’s has made moves to reduce its operating expenses by roughly 30%. It has also deferred the majority of its payables and said that it was renegotiating its real estate contracts.