Feb 26 (Reuters) - Women’s apparel retailer Chico’s FAS Inc said it would shut about 120 stores by 2017 and open fewer this year than last, two days after the Wall Street Journal reported that a private equity firm had dropped its attempt to buy the company.
Chico’s, struggling to compete against so-called fast-fashion retailers such as Inditex SA’s Zara, Hennes & Mauritz AB’s H&M and Forever 21, also said it had laid off about 240 head office and field management staff.
Chico’s shares rose 2.5 percent to $17.70 in early trading on Thursday, helped by the company’s announcement that it would spend $250 million to buy its own shares in the current quarter.
The retailer, which sells mainly private-label casual clothing and accessories to older professional women, said it would cut capital spending to about $100 million this year, a drop of about 29 percent from the three-year average.
Chico’s said it would close about 35 stores this fiscal year ending Jan. 31, 2016 and open about 40. The company, which operates 1,547 stores in the United States and Canada, opened 109 stores last year.
Private equity firm Sycamore Partners pulled out of talks to buy Chicos after failing to secure financing on acceptable terms, the Wall Street Journal reported on Tuesday.
Chico’s reported a fourth-quarter net loss of $31.8 million, or 21 cents per share. The company lost $348,000 in the same period last year. Revenue rose 7.6 percent to $656.9 million. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Kirti Pandey, Don Sebastian and Ted Kerr)