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Chico’s Makes Interim CEO Permanent Amid Hostile Takover Fight

Chico’s Makes Interim CEO Permanent Amid Hostile Takover Fight

(Bloomberg) -- Chico’s FAS Inc., the women’s apparel retailer that’s fending off a hostile takeover bid, said it’s making Bonnie Brooks its permanent chief executive offficer while the head of its namesake brand is departing only months after she was hired.

Brooks had been serving as interim CEO since April. The company also named Molly Langenstein -- a former Macy’s Inc. executive -- as head of all the apparel groups, including the Chico’s brand and White House Black Market. Chico’s brand President Karen McKibbin, a veteran of upscale department store Nordstrom Inc. who joined the company in April, has resigned.

“In addition to providing continuity, Bonnie’s leadership enables us to continue leveraging both her experience driving numerous successful turnarounds at other apparel retailers as well as the knowledge she already has of Chico’s FAS,” Chairman David Walker said in a statement.

The retailer, which has faced declining sales for years, has been the target of a hostile takeover bid by Sycamore Partners, which has made three offers for its outstanding shares since April, each one lower than the previous. Chico’s rejected the most recent $3-a-share cash offer in late June, saying it “substantially undervalues” the company.

Chico’s Makes Interim CEO Permanent Amid Hostile Takover Fight

Shares of Chico’s have fallen 3.9% so far this month to $3.23.

Sycamore, which owned about 6.5% of Chico’s as of June, called the bid a “significant premium” to what it believes the retailer would be worth absent the takeover speculation. At the time of the last bid on June 16, Sycamore Managing Director Stefan Kaluzny said the firm would be prepared to increase the offer if due diligence shows Chico’s plans to boost cash flow in the second half of the year is achievable.

Chico’s stock has lost more than 40% of its value this year as it struggles to reinvigorate revenue. Same-store sales, a key metric for retailers, have declined for 15 quarters, and the company in June cut its full-year sales forecasts.

To contact the reporter on this story: Lisa Wolfson in Boston at lwolfson@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder, Craig Giammona

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