Chico's Acquisition Pushes E-Commerce Revenue Share Over 15%

The recent acquisition by Chico's FAS of the direct-to-consumer (DTC) retailer Boston Proper will push e-commerce's share of Chico's total sales over the 15% mark in fiscal 2012.

"Since this achieves a goal I set for Chico's in the last several years, I am now raising the bar for DTC to be 20% of our total sales," said president and CEO Dave Dyer during a recent conference call discussing the retailer's Q2 2011 financial results. Chico's operates over 1,200 stores but has also made significant recent investments in tying its store and digital channels together more closely.

According to Dyer, Boston Proper, which is "about modern, daring style with a sensual feel" serves a "similar demographic to our current brands, yet there is minimal overlap with our existing customer base. Our first priority will be to accelerate the growth of the Boston Proper DTC business by leveraging the expertise that we have in Chico's FAS via digital marketing, customer analytics, and of course our state-of-the-art systems."

Prior to the acquisition, Dyer led an initiative to invest $30 million in new systems to build the company's e-commerce business. One solution that has successfully built online traffic has been integrating its enormous customer database with SAS On Demand: Marketing Automation, leveraging e-mail and other targeted promotional vehicles to direct customers to the Chico's website.

Chico's is paying $205 million for Boston Proper, with the transaction expected to be complete during the third quarter. The retailer had a strong second quarter, with sales rising to $551.4 million, an 18.5% increase over the same period last year. Consolidated comparable sales rose 12.8% during the quarter, reflecting Chico's strong position in brick-and-mortar retailing: the retailer had lowered its weeks of inventory supply on hand companywide by 4% during Q2 while also increasing inventory per selling square foot by 8%.

For related content see: Chico's Accessorizes Web Sales

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