Barington Capital Group Calls for Chico's FAS, Inc. to Address Its Sustained Period of Share Price Underperformance
Barington Capital Group, representing approximately 2% of Chico's FAS, Inc. (NYSE: CHS) shareholders, has urged the company to implement measures to enhance long-term shareholder value.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Barington Capital Group, representing approximately 2% of Chico's FAS, Inc. (NYSE: CHS) shareholders, has urged the company to implement measures to enhance long-term shareholder value. They highlight struggles at Chico's and White House Black Market, overshadowing success at Soma, which could exceed Chico's $640 million enterprise value. Barington supports the new CEO's digital-led strategy and advocates for board refreshment, increased financial transparency, and strategic alternatives. They believe these actions could substantially increase shareholder value.
Positive
- Soma brand performing strongly, driving potential enterprise value above $640 million.
- New CEO's digital-led operating plan aims for enhanced merchandise quality.
- Management's cost-cutting measures project a return to profitability in FY 2021.
Negative
- Underperformance of Chico's and White House Black Market brands.
- Board perceived as stagnant, contributing to operating struggles.
Details
News Market Reaction – CHS
The recorded move for CHS in the trading session of this news was +6.88%.
Data tracked by StockTitan Argus. Session date unavailable.
AI-generated analysis. How Rhea-AI works. Not financial advice.
NEW YORK, June 7, 2021 /PRNewswire/ -- Barington Capital Group, L.P. ("Barington"), which represents a group of shareholders that collectively owns approximately
Barington believes the operating struggles at the Company's fashion clothing brands, Chico's and White House Black Market, have long overshadowed the positive contributions from Soma, the Company's intimate apparel and loungewear brand. In Barington's opinion, the Company's Board is largely responsible for this underperformance, as it has failed to adequately refresh the Board.
Soma has been performing strongly due to its compelling product assortments and inclusive message. Based on recent peer valuations, Barington believes Soma's value could exceed the Company's enterprise value of approximately
Barington sees promise in the new CEO's operating plan, which is driven by digital-led retailing and improvements to merchandise quality. Given the sizable cost reductions enacted by management last year, Barington expects to see a return to profitability in FY 2021.
Barington is confident that there are multiple paths to enhance value at Chico's, including (a) refreshing the Board with directors that have relevant expertise in digital and women's fashion specialty retailing, (b) expanding financial disclosure for each of the Company's brands, (c) maximizing operating performance by driving digital investments and maintaining cost discipline, and (d) exploring strategic alternatives for the Company and its brands.
Barington is confident that if the Company takes the steps outlined above, it will create substantial long-term value for shareholders.
The full text of the Barington's letter to the Company is available at www.barington.com/chicos.html
About Barington Capital Group, L.P.
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 significant experience investing in consumer and retail and apparel companies with prior investments in L Brands, Avon Products, Darden Restaurants, The Children's Place, The Jones Group, Warnaco, Collective Brands, Steve Madden and others.
PLEASE SEE http://www.barington.com/chicos.html FOR IMPORTANT DISCLOSURES CONCERNING BARINGTON'S LETTER.
View original content:http://www.prnewswire.com/news-releases/barington-capital-group-calls-for-chicos-fas-inc-to-address-its-sustained-period-of-share-price-underperformance-301306669.html
SOURCE Barington Capital Group, L.P.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.