Chico's FAS, Inc., which runs the Chico's, White House Black Market, Soma and TellTale banners, on Wednesday said that Shelley Broader has resigned from her roles as CEO and President, and member of the board.
Bonnie Brooks, formerly vice chair, president and CEO of Hudson's Bay Company and a Chico's FAS board member, has been appointed interim CEO, effective immediately, according to a company press release.
The turmoil in Chico’s executive ranks reflects slow progress in its turnaround.
In January, the company announced a "retail fleet optimization plan" that will entail shuttering 250 stores over the next three years and a review of the company's operations to cut costs. But the retail company remains under siege. At the end of its latest quarter, Chico's FAS comps tumbled 3.8%. Store comps at Chico's fell 7.9%, at White House Black Market fell 2.9% and at Soma lingerie rose 6.2%.
"We view this at least in part as a reflection of ongoing low visibility of fundamental improvement, and continue to see 2019 as the worst year from a profitability perspective since 2008," MKM Partners Managing Director Roxanne Meyer wrote in comments on the CEO departure emailed to Retail Dive.
The company’s plans to close so many stores could also ultimately hurt revenue, including from the digital channel. "[A] big unknown is the impact of store closures planned over the next few years on e-commerce sales," Meyer warned.
Last year was rough for the flagship brand, which could be a reason for Ellis’ departure. While the company has announced a few smart innovations — including a tech-enabled fit bra at its Soma lingerie brand and a new online lingerie line aimed at millennials — it’s just not clear where the brand or its siblings are headed.
"We view [Chico’s FAS] as a continued story of playing defense (cost cuts, store closings) as Chico's course-corrects," Meyer said. "While there are ongoing initiatives to improve costs, there continues to be a lack of visibility around comp stability at [White House Black Market] and comp inflection at Chico’s. 2018 marked a big step in the wrong direction from a product and branding perspective at Chico's, and while changes are underway, we're not convinced they are the right ones."