It’s Black and White for Chico’s

Sep 01, 2003 9:30 PM  By

Having firmly established its brand of apparel for upscale baby-boomer women, Chico’s is expanding via acquisition. The Fort Myers, FL-based marketer has agreed to buy women’s apparel retailer White House for $90 million in cash and common stock.

Glen Burnie, MD-based White House consists of 103 White House/Black Market stores, which sell only black and white clothing. The $531 million Chico’s has about 400 stores. Its catalog and Internet business accounted for approximately 3% of sales, or $16.1 million, last year.

The deal came at an opportune time for both companies, says Jim Frain, Chico’s senior vice president of marketing. “The most obvious, and quickest, synergy will take place on the fulfillment side,” says Frain. It was just last fall that Chico’s moved its distribution center from its corporate headquarters in Florida to a larger facility 40 miles outside Atlanta. White House, meanwhile, had started looking for a fulfillment provider at the same time the deal was made. “It is a perfect fit because we have enough room and technology to take on the retail fulfillment for White House,” Frain says.

In addition to sharing fulfillment functions, the two companies have customer demographics in common. White House skews slightly younger, but the best buyers of both are 35-55 years old with an annual household income of more than $100,000. The Chico’s database has several million names, while that of White House has several hundred thousand.

“In many ways, White House is where Chico’s was four or five years ago,” Frain says. During the past few years, Chico’s launched a national ad campaign and grew its direct marketing channels. Its largest advertising vehicle is the catalog, a “few million” copies of which mail each month. While no meetings have taken place to discuss a direct marketing future for White House, Frain says that if the company were to launch a book under the guidance of Chico’s, it would likely begin with a traffic-driving catalog mailed to retail shoppers and prospects.

What won’t change, maintains Frain, are the two brands’ unique identities. “There has been no talk of cross-merchandising, since both brands are very distinct and defined,” he says.