Chico’s FAS has announced a three-phase plan for reopening some of its 1,300+ stores that will kick off on May 4. The first two phases include filling national orders using its stores’ inventory, then adding a buy online/pick up in-store (BOPIS) service that will include contactless curbside pickup.
The third phase of the reopening plan will launch a new shop-by-appointment service for all the retailer’s brands: Chico’s, Chico’s Off the Rack, White House Black Market, White House Black Market Outlet and Soma. Store openings will be consistent with local health and safety guidelines.
While its stores have been shuttered, Chico’s has been able to compensate somewhat with a digital sales boost. Online sales increased 16% for the six weeks that ended April 25, compared with the six weeks that ended March 14, 2020, the retailer reported.
“Over the past six weeks, we have seen strong customer demand in our digital channels, including increased traffic and sales on our web sites and increased engagement on our social media channels,” said Bonnie Brooks, CEO and President of Chico’s in a statement. Product categories driving traffic and sales growth include intimates, sleep, cozy, active and lounge.
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The locations and relatively small size of most Chico’s stores will work to the retailer’s advantage, according to Brooks. “The majority of our stores are under 3,500 square feet and are located in easily accessible shopping plazas,” she noted. “Our teams have the ability to manage the number of customers in the stores, provide hand sanitizer and masks to customers, create new flexible distance between clothing racks and adjust fitting rooms to accommodate social distancing practices.”
The retailer placed the majority of its associates on furlough on April 1 and reduced pay or hours for most remaining team members, which also included cutting salaries for the executive leadership team and Board of Directors by 50%. Employees at Chico’s distribution centers, which remain operational, are still receiving full wages.
Brooks and her team are finding ways to improve the company’s financial position during the COVID-19 crisis, building on a business overhaul that began in 2019. “During the past few week we have significantly reduced our weekly cash burn,” said Brooks. “Our actions have been designed to reduce operating expenses by approximately 30% and we are committed to holding this cost structure for the long term. We have deferred the majority of payables and are renegotiating all contracts, including real estate.”
