FORT MYERS, Fla., Nov. 2, 2020 /PRNewswire/ -- Chico's
FAS, Inc. (NYSE: CHS) (the "Company") today announced the closing
of its amended and extended $300
million Senior Secured Credit Facility (the "Credit
Facility"), consisting of a $285
million asset-based revolving credit agreement ("Revolver")
and a $15 million "first-in last-out"
term loan ("FILO"), with Wells Fargo & Company as the lead
lender. The Revolver and FILO have a five-year term maturing on
October 30, 2025.
"We are pleased to announce that the Company has significantly
strengthened our liquidity and enhanced our financial stability for
the foreseeable future. As well, this new Credit Facility
demonstrates the confidence our lenders have in Chico's FAS and the
sustainable, long-term success of our brands," said Molly Langenstein, Chief Executive Officer and
President. "We also are continuing to benefit from the aggressive
measures we initiated earlier this year to streamline the
organization and reduce operating and occupancy costs. These
substantial ongoing cost savings initiatives are expected to
benefit future years and reflect a cultural shift in how we manage
our business."
Molly Langenstein, continued:
"Our new casual and cozy deliveries hitting stores were informed by
customer demand during the store closure period, and these new
products are resonating well across all three of our brands.
Together with our three differentiated brands and strong customer
loyalty for each of the brands, we are confident we have the
foundation necessary to successfully navigate both the pandemic and
longer term. Indeed, we are positioned to create meaningful
value for our shareholders."
David Oliver, Interim Chief
Financial Officer, said: "We are pleased to have added liquidity
and based on our projected cash flows do not expect to make
additional draws on the Credit Facility this or next fiscal year.
Our leaner expense base will allow for increases in sales to
meaningfully improve profitability as the business returns to a
more normal environment. We plan for a major component of our 2020
expense reductions to roll through to the bottom line in 2021, and
as business continues to grow, we expect to generate increased
profits."
The amended and extended Credit Facility replaces the prior
$200 million credit facility, which
was scheduled to mature in August
2023. As previously reported, debt at the end of the second
quarter of fiscal 2020 totaled $149
million, and there were no new borrowings on the facility
prior to its amendment.
Interest on the Revolver is LIBOR (floor of 0.75%) plus a margin
of 2.25% to 2.50% (based on average quarterly availability), and
interest on the FILO is LIBOR (floor of 0.75) plus 4.50%. The
Credit Facility is secured by inventory, receivables and real and
intellectual property.
PJ Solomon acted as the Company's exclusive financial advisor
for the transaction.
ABOUT CHICO'S FAS, INC.
Chico's FAS is a Florida-based
fashion company founded in 1983 on Sanibel Island, Fla. The Company
reinvented the fashion retail experience by creating fashion
communities anchored by service, which put the customer at the
center of everything we do. As one of the leading fashion retailers
in North America, Chico's FAS is a
company of three unique brands - Chico's®, White House
Black Market® and Soma® - each thriving in
their own white space, founded by women, led by women, providing
solutions that millions of women say give them confidence and
joy.
Our Company has a passion for fashion, and each day, we provide
clothing, shoes and accessories, intimate apparel and expert
styling in our brick-and-mortar boutiques, digital online boutiques
and through Style Connect, the Company's proprietary digital
styling tool that enables customers to conveniently shop wherever,
whenever and however they prefer.
As of August 1, 2020, the Company
operated 1,313 stores in the U.S. and sold merchandise through 69
international franchise locations in Mexico and 2 domestic franchise airport
locations. The Company's merchandise is also available at
www.chicos.com, www.chicosofftherack.com, www.whbm.com,
www.soma.com and www.mytelltale.com as well as through third-party
channels.
To learn more about Chico's FAS, visit www.chicosfas.com. The
information on our corporate website is not, and shall not be
deemed to be, a part of this press release or incorporated into our
federal securities law filings.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements, which
include but are not limited to the quotes from Ms. Langenstein and
Mr. Oliver, relate to expectations and projections regarding the
Company's future performance and may include the words
"anticipate," "believe," "could," "estimate," "expect," "intend,"
"may," "will," "plan," "outlook," "project," "should," "strategy,"
"potential", "confident" and similar terms. These forward-looking
statements are based largely on information currently available to
our management and on our current expectations, assumptions, plans,
estimates, judgments and projections about our business and our
industry, and are subject to risks and uncertainties that could
cause actual results to differ materially from historical results
or those expressed or implied by such forward-looking statements.
Although we believe our expectations are based on reasonable
estimates and assumptions, there is no assurance that our
expectations will, in fact, occur or that our estimates or
assumptions will be correct, and we caution investors and all
others not to place undue reliance on such forward-looking
statements. Factors that could cause actual results to differ
include, but are not limited to: the effects of the COVID-19
pandemic and uncertainties about its depth and duration, including
any resurgence, as well as the impacts to general economic
conditions and the economic slowdown affecting consumer behavior
and spending (before and after the COVID-19 pandemic) and potential
future temporary store closures due to government mandates; the
effectiveness of store reopenings, cost reduction initiatives
(including our ability to effectively restructure our lease
portfolio to obtain rent relief), the extent, availability
and effectiveness of any COVID-19 stimulus packages or loan
programs, including the CARES Act, the ability of our third-party
business partners, including our suppliers, logistics providers,
vendors and landlords, to meet their obligations to us in light of
financial stress, staffing shortages, liquidity challenges,
bankruptcy filings by other industry participants and other
disruptions due to the COVID-19 pandemic, the impact of the
COVID-19 pandemic on our manufacturing operations in China, and trends in consumer behavior and
spending during and after the end of the pandemic; our ability to
successfully implement any alternatives that we pursue including
our ability to achieve the cost savings and additional liquidity
described in this release; government actions and policies;
increases in unemployment rates and taxes; local, regional,
national and international economic conditions; changes in the
general economic and business environment; changes in the general
or specialty retail or apparel industries, including the extent of
the market demand and overall level of spending for women's private
branded clothing and related accessories; the exiting of store
operations in Canada and other
future permanent store closures; the effectiveness of our brand
strategies, awareness and marketing programs; the ability to
successfully execute and achieve the expected results of our
business strategies and particular strategic initiatives
(including, but not limited to, the Company's digital strategy,
organizational restructure, retail fleet optimization plan and
three operating priorities which are driving stronger sales through
improved product and marketing; optimizing the customer journey by
simplifying, digitizing and extending the Company's unique and
personalized service; and transforming sourcing and supply chain
operations to increase product speed to market and improve
quality), sales initiatives and multi-channel strategies; customer
traffic; our ability to appropriately manage our inventory and
allocation processes; our ability to leverage inventory management
and targeted promotions; the successful recruitment of leadership
and the successful transition of members of our senior management
team; uncertainties regarding future unsolicited offers to buy the
Company and our ability to respond effectively to them as well as
to actions of activist shareholders and others; changes in the
political environment that create consumer uncertainty; the risk
that our investments in merchandise or marketing initiatives may
not deliver the results we anticipate; significant changes to
product import and distribution costs (such as unexpected
consolidation in the freight carrier industry, and the ability to
remain competitive with customer shipping terms and costs
pertaining to product deliveries and returns); new or increased
taxes or tariffs that could impact, among other things, our
sourcing from foreign suppliers; and significant shifts in consumer
behavior. Other risk factors are detailed from time to time in the
Company's Quarterly Reports on Form 10-Q, Annual Report on Form
10-K and other reports filed with the Securities and Exchange
Commission. These factors should be considered in evaluating
forward–looking statements contained herein. There can be no
assurance that the actual future results, performance, or
achievements expressed or implied by such forward-looking
statements will occur. The Company does not undertake to publicly
update or revise its forward-looking statements even if experience
or future changes make it clear that projected results expressed or
implied in such statements will not be realized.
Investor Relations Contact:
Tom Filandro
ICR, Inc.
(646) 277-1235
tom.filandro@icrinc.com
Media Relations Contact:
Pashen Black
Director of Corporate Public Relations
(239) 218-3388
pashen.black@chicos.com
Chico's FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239)
277-6200
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SOURCE Chico's FAS, Inc.