Clifton Robbins of Blue Harbour Group has the unenviable task
of following Alexander Roepers.
Robbins is a value investor focused on small- and mid-cap
companies in the U.S. His Blue Harbour Group, founded in 2004,
boasts total assets of $1.6 billion. The group's mantra is,
"Think Like an Owner."
Blue Harbour invests for the long term - its typical holding
period is two to three years. The company only backs management
teams that are smart, flexible and determined to win.
Blue Harbour attempts to help companies unlock value through
sales of non-core businesses and acquisitions in consolidating
industries - among other initiatives.
With that, Robbins revealed Blue Harbour's latest stock
- Specialty retailer with market cap of $2.7 billion, $2.3
billion enterprise value. Blue Harbour lead shareholder - owns
roughly 6% of company.
- Targets female consumers ages 30-65 through a portfolio of
four brands. Chico's growing slowly but generating lots of
White House Black Market
is its fastest-growing business.
- All four brands are growing their store base. Expect it to
grow 50% in the coming years.
- Has been beating competitors - sales have grown 50% since
2007 while sales at rivals such as Talbots have been
- Chico's is more productive than its peers, with sales of
$751 per square foot - almost double Talbots and Ann
- Near-term headwind: U.S. retail sales slumping the last few
years. However, that has helped drive down the stock's
- New leadership beginning in 2009, helped accelerate
double-digit revenue growth and 235 increase in same-store
, Chico's "intimate women's apparel" business, is emerging as a
potential rival to Victoria's Secret.
- Company has no debt, plenty of cash - $370 million by
year's end. Should have $720 million by 2015.
- In the process of share repurchases that will continue in
the coming years.
- 40-80% upside
- More a growth stock than a value stock