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  • INDUSTRY NEWS

    • On May 17, 2019, it was reported, Chico's board, in consultation with independent financial and legal advisors, has unanimously rejected Sycamore's second cash offer of $3.50 per share, following an earlier one for $4.30 per share, the company said. In a statement, Board Chair David Walker expressed confidence in newly appointed interim CEO Bonnie Brooks' merchandising and marketing strategies, and said that, in light of Chico's "strong operating and financial foundation, including a portfolio of differentiated brands, loyal customers and robust omnichannel capabilities," both Sycamore offers "fail to recognize the full value of the Company and its future prospects." With each brand poised for topline growth, the portfolio stands to "deliver value to our shareholders well in excess of what Sycamore has proposed," he also said. On May 13, 2019, Chico's FAS, which runs Chico's, White House Black Market, Soma and TellTale, said its board will "carefully review" an unsolicited offer from private equity firm Sycamore Partners to acquire the company for $3.50 per share in cash. Sycamore as of May 10 owns 6.6% of Chico's shares, according to a Sycamore filing to the Securities and Exchange Commission. Without revealing the timing, the apparel conglomerate also acknowledged that it had recently received and rejected an earlier unsolicited proposal from Sycamore for $4.30 per share in cash and that the board had unanimously determined that proposal "substantially undervalued Chico's FAS and was not in the best interests of Chico's FAS shareholders," according to a Chico's press release. The retail group in January announced plans to shutter 250 stores over the next three years among other cost cuts. Then last month, former Hudson's Bay Co. vice chair, president and CEO Bonnie Brooks replaced Shelley Broader as Chico's CEO, president and board member. That decision "to terminate the CEO suggests that there are serious issues in the business. We believe that the Company's financial performance will continue to deteriorate absent meaningful changes," Sycamore told Chico's, according to a letter accompanying its Friday filing.
    • On May 17, 2019, it was reported, FFO Home is getting out of the stand-alone bedding store business. The Top 100 company is restructuring its greater Louisville, Ky., operations with plans to open Mattress & More by FFO Home operations inside its FFO Home locations in the market and close the 15 standalone Mattress & More bedding stores. The idea is to bring the expertise and selling techniques of Mattress & More into the full-line stores and develop a bedding business in Kentucky that rivals the strength of the category in FFO Home's core market full-line stores. In the process, FFO expects to save on marketing expenses and real estate costs and will no longer compete against itself for the same bedding dollars, FFO Home President and CEO Larry Zigerelli told Furniture Today. The move follows FFO Home's acquisition early last year of Service Furniture and Bedding, which included 13 full-line Furniture Liquidators stores and 15 Mattress & More bedding stores in Kentucky and Indiana. FFO later rebranded Furniture Liquidators to FFO Home but kept the Mattress & More banner and took the first steps to expand the bedding specialty concept into its other FFO markets late last year with the opening of test store in Jonesboro, Ark. At least six additional sites had been identified for future expansion if the test store proved successful. But Zigerelli said conditions have changed, and the recent spate of bedding store closings by Top 100 companies Mattress Firm, Sleep Outfitters and Mattress1One indicate the overall market is overstored by sleep specialty locations. The better approach, he said, is to keep that business under one FFO Home roof while integrating the additional brands, comfort testing, personalized selling techniques
    • On May 17, 2019, Reuters is reporting that department store chain Kohl's has taken steps to acquire At Home, the Plano, Texas-based home dcor chain. Citing unnamed sources, Reuters is reporting that Kohl's, "recently started conversations with At Home Group to explore a deal." The home dcor retailer has been exploring potential sale options for the last three months and is said to be in "advanced deal negotiations" with private equity firms, including Hellman & Friedman LLC according to the report. Kohl's has pursued a number of strategies recently to expand its customer base, including signing a deal with Amazon.com to merchandise Echo dot speakers and Amazon Kindle's. This follows a pilot program to accept Amazon returns at Kohl's stores; a program that will be expanded to all Kohl's stores in July. Kohl's has also teamed with Popsugar on a new line of clothing and with Weight Watchers on a series of workshops and events in Chicago to boost sales of cookware and kitchenware. Kohl's has been investing in several new partnerships to bring in more shoppers. It signed a deal with Amazon.com Inc to display its Echo dot speakers and Kindle e-readers in its stores, while it partnered with Millennials-focused Popsugar to launch a new line of clothes. At Home's stock price is up approximately three percent today, while Kohl's stock is off slightly, trading at $64.04 this afternoon after starting the day at $64.43. At Home currently operates 185 locations, with a strong product concentration in home furnishings.
    • On May 16, 2019, it was reported, Fred's Inc. plans to close an additional 104 stores by the end of June. The decision was made amid ongoing review of the drug store retailer's store portfolio and on top of the nearly 160 closures it announced in April, according to a Thursday securities filing. The new closures were announced in tandem with a forbearance agreement Fred's entered into with a group of lenders. Fred's CEO Joseph Anto described the additional closures in a press release as a "necessary step in the continued restructuring of Fred's." The retailer has hired Malfitano Advisors and SB360 Capital Partners to help liquidate the stores.