I have a tonne of high-end, designer clothes and shoes in my wardrobe that I bought on sale; they are almost all black and appropriate for most New York occasions, but not for the trip to Israel I had planned for March 2014. I sought advice from my stylish and best-dressed friend, a longtime insider and executive in the fashion world who had previously taken a trip akin to this one. What attire did you don? Inquiring about the clothes, I queried. Chico’s, I believe. jersey that is mostly matte black. Chico’s!!! I had a hard time believing it. Although she is a fashion star, this woman is obviously not a snob. So I took her advice and went to Chico’s in quest of clothing that would be cosy, appropriate for a variety of settings, seasonless, packable, and, dare I dream, stylish.

What I discovered shocked me.

The typical Chico’s store is roughly 3000 square feet, but the one in my neighbourhood is much smaller and packed with what appears to be an overwhelming number of bold prints. Both Chico’s retail strategy and customer expectations depend on those prints. They convey a sense of freshness and fashion; they are distinctive and Chico’s own designs. Prints serve as a reminder of the company’s history and encourage customers to purchase new items. There are numerous animal prints, and a senior Chico’s executive recently said that “leopard is a neutral for us.” The products are divided into lifestyle categories, such as Travelers by Chico’s, which features mix-and-match separates in a matte jersey-like fabric that are foldable and wrinkle-proof as well as one wrap dress. Black, brown, and navy make up the majority of the colour scheme; accent pieces with prints add some flair. Additionally, there are highly wearable no-wrinkle blouses in white, black, and a few vibrant colours that go nicely with other floor-level items like tanks, tees, and stretch jeans. Another staple of Chico’s retailing is a table of attractive, reasonably priced, colour coordinated costume jewellery to complete an outfit.

Although the dressing rooms in this bustling store are small and without mirrors, there is a central mirrored area with enough room to judge what looks nice and what doesn’t after trying things on. Chico’s sales personnel are knowledgeable, courteous, and helpful in assisting what seem to be satisfied, loyal, and repeat clients in finding the perfect products. The first of Chico’s five fundamental values is superior customer service, or “Customers First,” and it helps explain why Chico is successful. As a subtle reminder of the value of each and every client, employee paychecks are signed, “The Chico’s FAS Customer.” The firm relies heavily on repeat consumers. Once customers meet a non-expiring $500 purchasing barrier, Chico’s rewards them through their registered “Passport” customer loyalty programme, which offers, among other things, a 5% discount on all purchases. Importantly, the Passport programme gathers useful client information that is efficiently used for marketing and retail objectives. Chico’s is aware that a sizable percentage of its business comes from a devoted customer base. Customers frequently return to Chico’s to check out the latest offerings. They receive frequent catalogue mailings and coupons depending on their previous shopping behaviour. Chico’s engages in continual communication with its customers to entice them to visit the shop, catalogue, or website to make a purchase.

Consumer demographics
The daughters and granddaughters who go shopping with their mothers and grand mothers are the only younger women visible at Chico’s. It is clear from looking at the customers and the items that Chico’s caters to mature shoppers, aged 40 and up. Many of the pants in this store have elasticized waistbands, overblouses and tunics are made to cover upper arms and stomachs, and Chico’s So Slimming jeans have “secret fit technology” for added comfort. a blessing for older clients whose numbers have declined over time. Those skilled sales representatives and managers, who are also of a particular vintage, are stylishly attired in Chico’s apparel and costume jewellery, showcasing it to its most wearable and fashionable advantage. Promotions abound. Since practically everything in the store is on sale in some way—for example, buy one, get one at 50% off, 60% off all spring products, friends and family discounts, etc.—it is nearly hard to determine actual prices. My purchases, which were already reasonably priced, received further discounts at the register.

Family History
In 1983, Marvin and Helene Gralnick opened a tiny shop called Chico’s on Sanibel Island in Florida where they sold sweaters and folk art from Mexico that they had imported. After becoming public in 1993, Chico’s was the retail industry’s darling, but it lost its direction when the Gralnicks left soon after. After retiring, the Gralnicks came back twice, and the company ultimately focused on an underserved older, ageing baby boomer customer. Chico’s performed successfully for a while before losing its direction once more and running into operational issues. Chico’s reported a net loss of $40.5 million for the final quarter of 2008. The share price of the company was $2.55, down from a peak of $47 in 2006, the year the Gralnicks officially retired.

David Dyer, who has been a board member of Chico since 2007, was appointed president and CEO of Chico’s FAS in January 2009. Retail veteran Dyer started his career at Burdines, where he held senior merchandising positions for 17 years until joining Lands’ End in 1989. Dyer eventually rose to the position of president and CEO, where he negotiated the sale of Lands’ End to Sears. Cinny Murray, a Chico’s president with 30 years of retail experience who has led the drive to bring the brand back to its roots and win back lost customers, was hired by Dyer shortly after he took over as CEO. According to several signs, Dyer and Murray have made progress in regaining and investing in their customers at their 146,000 square foot headquarters in Ft Myers, Florida, together with their design team. Up until the end of 2013, they had comparative store sales gains of 5% to 7%.

Tech savvy
Dyer has refocused the brand despite ongoing challenges: “We had folks who wanted our customer to be a little younger and more current…
So, Dyer stated in a recent interview, “We lost focus on the customer and that really started the troubles. Dyer also made large expenditures in technology and infrastructure. Over a third of the company’s capital budget was allocated to systems in 2010. Data-driven marketing is nothing new for Dyer, and Chico’s can observe how the web and shops interact through customer data analytics and make plans appropriately. Although it is difficult to be anything else than an omnichannel business these days, Chico’s describes itself as one. You can see this for yourself if you go shopping. Customers frequently receive advice from store employees to hunt for a certain item online. Some sizes, particularly those in the extra small and extra big range (Chico’s has its own unique sizing system), aren’t even offered in-store and can only be bought online. The same is true for shoes, which are almost exclusively sold online alone, negating the need for in-store storage and laborious inventory management. “Enjoy free shipping if the shoe fits. If not, take advantage of free returns, says Chico’s website. Clientele appear accustomed to this formula. Chico’s describes what currently seems to be common shopper behaviour, as do many other retailers. Customers browse online stores to discover what is new before visiting a store to make a purchase. or the opposite. In today’s world, everything must function effortlessly in both directions or it won’t be worth the effort.

Multibrand Advertising
Chico is not the only person with FAS. Under the Chico’s, White House Black Market (bought in 2003), Soma Intimates, and Boston Proper banners, it is a multi-brand specialty shop of private-label clothing. Sales for Chico in FY 2014 totaled $2.64 billion. All of Chico’s brands cater to older consumers with incomes ranging from $50,000 to $100,000 who desire reasonably priced clothing with distinctive style, comfort, and ease of care. What other merchant emphasises comfort? Care is simple! How many businesses actively court senior citizens, take the time to learn about their lifestyle, and feature them in all of their marketing and communications while obviously looking fantastic? It only deviates from the retail sector’s norm.

With 611 Chico’s, 434 White Horse Black Market, 232 Soma Intimates boutiques, plus outlet shops and e-commerce sites for each brand, Chico’s operated 1,472 stores in the US as of the beginning of 2014. Especially among older women, whose lingerie requirements may be better met by Soma than by Victoria’s Secret, Soma Intimates, introduced in 2003 as a subsidiary of the Chico’s brand, may be well-positioned to seize a sizable chunk of the intimate clothing industry. Chico’s does not break out sales of Chico’s and Soma individually. White House Black Market, which caters to professional women over 35, accounts for 33.2% of net Chico’s FAS sales, while Boston Proper, a more recent acquisition, accounts for 3.8%. Based on further retail expansion, S & P anticipates sales of $2.88 billion for the fiscal year of 2015. In the near future, Chico’s plans to have over 2000 stores, including 800 to 850 Chico’s and over 600 Soma brand stores.

In Progress
Chico’s FAS experienced a 22% decline in profits and a 2.6% decline in same-store sales after a difficult first quarter as a result of higher expenditures and fewer traffic brought on by the abnormally harsh weather that has affected numerous businesses this season. For the current fiscal year, Chico’s reduced their projected store growth plans from 120 to 130 new stores and outlets to 107. Despite lower-than-expected consumer traffic, customer conversion rates—the proportion of visitors who actually make purchases—are said to be higher than average for the sector.

Chico’s stock, which was trading considerably higher due to “chatter” about the firm going private as of this writing, is exhibiting some strange activity. Chico’s is “exploring a sale to private equity and has discussed a deal with potential buyers that may lead to one of the largest take-private transactions” this year, according to a Financial Times report from June 9, 2014,” Owner of J.Crew and retail private equity investment Leonard Green & Partners disclosed a 1.34% ownership in the business in April 2014. Blue Harbour Group, an activist investor, revealed a 5.6% stake in Chico’s at the end of September 2013.

What these investors perceive is a company with a firm foundation in its business proposal, no debt (according to reports), and potentially a possibility to earn billions through complex stock moves (that are Greek to me). Other specialised merchants who are courting progressively younger and more fickle ladies face little competition from Chico’s focus on an underserved, elderly Baby Boomer core consumer. I’m not surprised by Chico’s higher conversion rates. Customers like Chico’s because they are treated well, feel at home among like-minded and similarly aged customers and sales associates, and can find easy-care, fashionable clothing at reasonable prices that fits and flatters older bodies. Young and trendy have always been valued in the fashion industry, but Chico’s has flipped that notion on its head by focusing on older clients and giving them a positive Chico’s shopping experience. disrupting in a certain way. Maybe not in the same way as a 3D printer, but in a more basic manner that is frequently disregarded in today’s overcrowded retail environment. Defining a customer, knowing her, understanding and providing her demands and maintaining that customer focus in a world where everyone always wants to do something new and different – that is simply good business. Let’s all keep tuned and see how the financial magicians play this out. In the meantime, I am going to go over to Chico’s for a pair of those So Slimming Jeans.