Private equity firm Sycamore Partners is acquiring women’s apparel brand Chico’s for $938.1 million, eight years after it began attempting to acquire the company.
The acquisition of the Florida-based retailer, which also owns White House Black Market and the Soma brand, follows a period of slowing sales as its business has been impacted by high inflation and store closures. Chico’s had also become the target of an activist investor, Barington Capital Group, who had pushed the company to explore the sale of its business in 2021 following a slump in its stock price.
But even before Barrington Capital pushed Chico’s to explore strategic options, Sycamore Partners was pursuing the 40-year-old retailer. In 2019, Sycamore offered $407.8 million to acquire the company — a deal later lowered to $350 million due to Chico’s worsening financial performance. The deal was later rejected by Chico’s shareholders, according to Reuters.
Sycamore’s latest offer will give Chico’s shareholders $7.60 per share, marking a 65% premium on its last closing price.
“Through this investment, we are gaining additional expertise, financial resources and strategic flexibility to fuel the growth of our company and three powerful brands,” said Chico’s CEO Molly Langenstein, adding that the two companies share a “commitment to providing solutions, building communities and creating memorable experiences to bring women confidence and joy.”
Sycamore’s acquisition of Chico’s, which is still subject to shareholder and regulatory approval, will add to the private equity firm’s growing portfolio of retail brands, including a stake in department store operator Belk, Dollar Express, and online specialty retailer Hot Topic.