Chico’s FAS Inc. said yesterday it will eliminate the Fitigues brand in its report of financial results for the fourth quarter and fiscal year ended Feb. 3.
Fort Myers, FL-based Chico’s acquired casual clothing multichannel merchant Fitigues early last year for less than $10 million in cash with the intention of expanding the regional brand across the country. The business includes a catalog, e-commerce Web site and eight stores. The business will be closed sometime during the first quarter.
Chico’s management determined that the Fitigues brand did not meet its internal expectations and opportunity for rollout, the company claimed in a statement.
Chico’s also reported that net sales for the fourth quarter increased 18.8 percent for a total of $46 million. Same-store sales for company-owned stores decreased 2 percent during the same period across both the Chico’s and WH-BM brands.
Catalog and Internet sales saw an overall 40.5 percent increase in the quarter and a 48.1 percent increase for the year, principally due to significant increases in the WH-BM and Soma merchandise available for sale through the Internet and, to a lesser extent, to increases in the Chico’s merchandise available for sale through the Internet and the increased circulation of catalog mailings.
The company’s fourth quarter net income totaled $18 million, or $0.10 per diluted share, compared to net income of $44 million, or $0.24 per diluted share, in the prior year’s fourth quarter.
Net sales for the fiscal year increased 17.2 percent for a total of $1.65 billion. Comparable-store sales for company-owned stores increased 2.1 percent during the same period. For fiscal 2006, the Chico’s brand same-store sales were essentially flat while same-store sales for the WH-BH brand increased about 11 percent.
Year-end net income totaled $167 million, or $0.93 per diluted share, compared to net income of $194 million, or $1.06 a diluted share in the prior period.
The company blamed fashion missteps that required heavy markdowns for its financial difficulties in the second half of 2006. It also said that it has not yet fully corrected the problem in terms of providing customers with a more compelling fashion offering.
In other news, Chico’s also said yesterday that it has completed the acquisition of all remaining franchise stores and, as result, is no longer in the franchise business. The move is expected to give the company greater control of its brand image and customer experience and also within the affected markets.