CHS Chicos FAS Inc

NEW YORK, May 24, 2016 /PRNewswire/ -- Barington Capital Group, L.P. announced today that one of its affiliates has formally notified Chico's FAS, Inc. (NYSE: CHS) of its intention to seek the election of directors to the Board of Directors of Chico's at the Company's 2016 Annual Meeting of Stockholders.  The Annual Meeting, which was initially scheduled to be held on June 16, 2016, has been postponed by the Company until July 21, 2016. 

Barington, which has been investing in Chico's since December 2013 and beneficially owns approximately 1.4% of its outstanding common stock, believes that the Company has failed to create meaningful long-term value for stockholders.  Chico's common stock is down approximately 77% from its all-time high of $48.90 per share on February 21, 2006, and, as indicated in the table below, has significantly underperformed its peers and the market as a whole over the past one, three, five and ten-year periods:¹

Barington has been communicating privately with the Company since March 2016.  During this time, it has shared its views that the Company should reduce its substantial corporate overhead and significantly decrease its advertising and other SG&A expenses (both of which, as a percentage of sales, are among the highest of its specialty retailer peers).  In an apparent recognition of Barington's concerns, Chico's has since taken steps to decentralize its marketing functions and expects to achieve approximately $14 million in annualized cost savings.  While Barington generally supports this action, Barington believes that more significant reductions in marketing expenses are needed and can be accomplished while still growing sales.  Barington further believes that Chico's should improve execution and corporate strategy at each of its three businesses in order to capitalize on opportunities in the relatively untapped market segment the Company serves.  Finally, it is Barington's belief that the Company should improve its corporate governance and executive compensation practices in order to better align management and stockholder interests.

To ensure that stockholders are represented by directors with the requisite experience and fiscal discipline to help implement Barington's recommendations, Barington intends to seek the election of two highly qualified individuals to the Company's nine-member Board of Directors.  If elected, Barington's nominees intend to work constructively with the other members of the Chico's Board to seek to improve the Company's long-term financial performance while ensuring that stockholder interests are adequately protected.  Barington is convinced that if the Company were more effectively managed and corporate overhead and SG&A expenses were reduced to levels comparable to its peers, Chico's could more than double its earnings per share in three years.

Barington's nominees are:

James A. Mitarotonda – Mr. Mitarotonda, 62, is the Chairman, President and Chief Executive Officer of Barington Capital Group, L.P.  Mr. Mitarotonda is an experienced public company director who has helped numerous public companies improve their long-term financial performance, corporate governance and executive compensation practices.  He is currently a director of A. Schulman, OMNOVA Solutions, Inc., The Eastern Company and Barington/Hilco Acquisition Corp.  He has also served as a director of The Jones Group, Ameron International, Griffon Corporation, Gerber Scientific, Register.com, Inc. and The Pep Boys – Manny, Moe & Jack, among other companies. 

Janet E. Grove – Ms. Grove, 65, has over 40 years of retail industry experience.  From 2003 to 2011, she was the Vice Chairman of Macy's, Inc., a leading department store chain.  She has also served as Chairman and Chief Executive Officer of Macy's Merchandising Group, where she was responsible for designing, sourcing, marketing and merchandising Macy's private branded products and managing key vendor relationships.

About Barington Capital Group:

Barington Capital Group, L.P. is a fundamental, value-oriented activist investment firm that was established by James A. Mitarotonda in January 2000.  Barington invests in undervalued publicly traded companies that Barington believes can appreciate significantly in value as a result of a change in corporate strategy or improvements in operations, capital allocation or corporate governance.  Barington's investment team, advisors and network of industry experts draw upon their extensive strategic, operating and boardroom experience to assist companies in designing and implementing initiatives to improve long-term shareholder value.  Barington has substantial experience investing in retail and other consumer-focused companies, with prior investments in Dillard's, The Children's Place, The Jones Group, Warnaco, Nautica, Steve Madden, Payless ShoeSource, Stride Rite, Collective Brands, Maxwell Shoe, Avon Products, Lone Star Steakhouse, Darden Restaurants and Harry Winston, among others.

Barington intends to make a preliminary filing with the Securities and Exchange Commission (the "SEC") of a proxy statement and an accompanying WHITE proxy card to be used to solicit votes for the election of its nominees at the 2016 Annual Meeting of Stockholders of Chico's FAS, Inc., a Florida corporation.

The following persons are anticipated to be, or may be deemed to be, participants in any such proxy solicitation:  Barington Companies Equity Partners, L.P., Barington Companies Investors, LLC, Barington Capital Group, L.P., LNA Capital Corp., James A. Mitarotonda, Janet E. Grove, Hilco, Inc., Joseph Gromek, SMS Capital, LLC, Thor ECM LLC and JM Cohen Long-Term Investment Fund, L.P.

BARINGTON STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ SUCH PROXY STATEMENT WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE PARTICIPANTS IN THE PROXY SOLICITATION.  SUCH PROXY STATEMENT, WHEN FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV.  IN ADDITION, STOCKHOLDERS MAY ALSO OBTAIN A COPY OF THE PROXY STATEMENT, WHEN FILED, WITHOUT CHARGE, BY CONTACTING BARINGTON'S PROXY SOLICITOR, OKAPI PARTNERS LLC, AT ITS TOLL-FREE NUMBER: (877) 566-1922 OR AT INFO@OKAPIPARTNERS.COM.

INFORMATION REGARDING THE DIRECT OR INDIRECT INTERESTS OF CERTAIN PARTIES ANTICIPATED TO BE, OR WHO MAY BE DEEMED TO BE, PARTICIPANTS IN ANY SUCH PROXY SOLICITATION IS AVAILABLE IN THE SCHEDULE 14A FILED BY BARINGTON AND OTHERS WITH THE SEC ON MAY 24, 2016, A COPY OF WHICH MAY BE OBTAINED AT NO CHARGE ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.

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SOURCE Barington Capital Group, L.P.