Fort Myers, FL–Chico’s FAS announced today that it agreed to buy privately-held Boston Proper for $205 million in cash as it posted a 47% rise in its second quarter income.
Chico’s executives said Boston Proper, whichs sell its merchandise directly to consumers through its catalog and website, will operate as a stand-alone division of Chico’s FAS, which includes Chico’s White House|Black Market and Soma Intimates.
Acquisition to Close by September
Boston Proper will continue to be run out of its Boca Raton, Florida-based headquarters “for the foreseeable future,” and Sheryl Clark, its president and ceo will remain.
“We are excited to become part of the Chico’s FAS family,” Clark said in a statement.
The deal is expected to close by September 30 and will add to Chico’s FAS’ earnings in the first year. Like its over divisions, Boston Proper caters to consumers age40 and above, which Chico’s has excelled at meeting their demands and expectations.
In its second quarter ended July 30, Chico’s earned $43.4 million, or 25 cents a share, compared with $30.5 million, or 17 cents a share, last year.
Net sales increased 18.5% to $551.4 million in the quarter, up from $465.4 million a year ago. Total comparable store sales increased 12.8% following an increase of 7.5% in the prior year quarter. The Chico’s/Soma Intimates brands’ comparable sales increased 11.9% following a 5.5% increase for the same period last year, and the White House|Black Market’s comparable sales increased 14.9% following a 12.5% increase for the same period last year.
The results beat analysts’ average estimates for earnings of 24 cents a share on revenue of $537.6 million
The specialty retailer, which operates 1,221 stores, said gross margin improved by 40 basis points to $309.3 million or 56.1% of net sales, driven by increased full-price selling partially offset by successful planned promotional activity.