Sycamore Partners to Acquire Chico’s FAS for $1B

The apparel company operates about 3 million square feet of retail space.

retail space

Chico’s FAS operates more than 1,250 stores in the U.S. Image by Ashim D’Silva via Unsplash

Apparel retailer Chico’s FAS has entered into a definitive agreement with Sycamore Partners to be acquired for nearly $1 billion in an all-cash deal. The company will become privately held and its stock will no longer be listed on the New York Stock Exchange.

Solomon Partners L.P. is acting as financial advisors to the firm and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor. Kirkland & Ellis LLP is working as legal advisor for Sycamore Partners.

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Chico’s FAS operated 1,258 stores in the U.S. across 46 states, as of July 29, 2023, totaling approximately 3 million square feet, and sold merchandise through 58 international franchise locations in Mexico, as well as two franchise locations in domestic airports. The company also operates a 503,000-square-foot office campus in Fort Meyers, Fla., and a distribution center spanning 550,000 square feet in Winder, Ga. The firm runs three separate brands including Chico’s, White House Black Market and Soma, and has more than 14,000 employees.

Deal details

Shareholders will receive $7.6 per share in cash, representing a 65 percent premium on the stock’s last close on Sept. 27, 2023. The agreement includes a 30-day “go-shop” period in which Chico’s FAS can solicit and consider alternative proposals. The transaction is expected to close by 2024’s first quarter. Sycamore Partners first attempted to acquire the company in 2019, extending offers at $3.5 and $3 per share respectively, both of which were unanimously rejected by the board of directors.

New York-based Sycamore Partners is a private equity firm that has approximately $10 billion in aggregate committed capital, specializing in consumer, distribution and retail investments. Reportedly, the firm was interested in acquiring Subway earlier this year, which ended up going to Roark Capital for $9.6 billion.

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