Chico's shareholders vote yes on sale to private equity firm; CEO gets 'golden parachute'

J. Kyle Foster, Fort Myers News-Press
·3 min read

Chico's FAS Inc. shareholders approved the sale of the fashion company for $1 billion cash to New York-based private equity firm Sycamore Partners.

Fort Myers-based Chico's held a special shareholders meeting on Wednesday and reported results in a filing with the Securities & Exchange Commission on Friday. The company did not respond to phone calls and emails seeking comment.

Chico's CEO Molly Langenstein leaving

In a letter to employees obtained by The News-Press/Naples Daily News, Chief Executive Officer Molly Langenstein said the deal is complete and she is stepping down. Lizanne Kindler, executive chair and CEO of KnitWell Group, also owned by Sycamore, is in charge. KnitWell includes apparel brands Ann Taylor, LOFT, and Talbots.

"Today as we join forces with KnitWell and Sycamore Partners, we are poised for an exciting growth trajectory," Langenstein wrote. "Sycamore's expertise in strategic investments and deep understanding of the retail landscape, combined with KnitWell's experience and scale, presents us with new opportunities and resources to expand and innovate."

With 104,126,111 – or 84% – of shares submitted, holders approved the sale with 102,806,53 shares in favor, according to the SEC filing. Under the terms of the agreement, Chico's shareholders will receive $7.60 per share. The company will be private and no longer traded on the New York Stock Exchange.

Molly Langenstein, CEO, Chico's FAS
Molly Langenstein, CEO, Chico's FAS

Chico's was founded in 1983 on Sanibel Island by Marvin and Helene Gralnick. It moved its office and distribution center to Fort Myers in 1994. The company also has the White House Black Market and Soma brands.

"Chico's, White House Black Market and Soma fit perfectly into the portfolio as established and inspiring brands that generate sustainable, high-quality result," Kindler said in a press release issued by Sycamore. "We are thrilled to welcome these brands, their more than 14,000 associates and their customers to the KnitWell family."

In her letter to employees, Langenstein said Kindler and other KnitWell executives would be at Chico's headquarters Friday for an "all hands" meeting.

Langenstein gets 'golden parachute'

Langenstein, who has been Chico's CEO since June 2020, will receive what's called Golden Parachute Compensation of at least $26.2 million, according to the company's proxy statement filed Nov. 29. She also will receive a retention bonus of $275,000, according to a Sept. 27 filing.

A 30-year retail veteran, Langenstein joined Chico's FAS in August 2019 as its president, Apparel Group, when annual revenue was declining. The company's revenue peaked between 2013 and 2015, bringing in $2.36 billion in 2015. It declined each year – with a low of $1.32 billion for Fiscal Year 2021 – and increased again in 2022 and 2023. The company reported $2.14 billion in revenue for FY 2023.

Private-equity firm Sycamore Partners completed its purchase of Fort Myer's-based fashion retailer Chico's FAS. Sycamore tried to buy the company in 2019 but abandoned its efforts.
Private-equity firm Sycamore Partners completed its purchase of Fort Myer's-based fashion retailer Chico's FAS. Sycamore tried to buy the company in 2019 but abandoned its efforts.

Sycamore Partners, which has about $10 billion in aggregate committed capital, had been trying to buy Chico's since 2019 when it offered $3 -$4.30 a share. Chico's stock closed Thursday at $7.59 a share.

As of Oct. 28, 2023, Chico's had 1,256 boutiques and outlets throughout the U.S., including Puerto Rico and U.S. Virgin Islands, as well as an online presence for each of its brands, according to its website.

Kate Cimini contributed to this report.

More: Fort Myers-based Chico's FAS moving ahead with sale, schedules shareholder vote

This article originally appeared on Naples Daily News: Chico's shareholders approve sale to Sycamore Partners; CEO leaving