Sycamore Partners lowers Chico's offer to $350 mln
By Greg Roumeliotis
June 19 (Reuters) - Private equity firm Sycamore Partners disclosed in a regulatory filing on Wednesday that it had lowered its offer for Chico's Fas Inc CHS.N to $350 million in cash, because of the U.S. women's apparel retailer's deteriorating financial performance.
It was the second time Sycamore had lowered its bid for Chico's this year. Last month, Chico's rejected an offer from Sycamore for $3.50 per share, after previously having turned down a higher offer of $4.30 per share.
Since then, Chico's reported a drop in quarterly cash flow and lowered its earnings guidance for the year. Sycamore's latest offer is for $3 per share.Chico's shares were hovering around $3.10 on Wednesday.
"Your most recent full-year guidance requires a significant improvement in performance trends and an increase in EBITDA of $10 million, or 25%, in the second half of the year," Sycamore Managing Director Stefan Kaluzny wrote in a letter to Chico's board Chairman David Walker.
"Should our due diligence provide us the confidence that this plan is achievable, we would be prepared to increase our offer," Kaluzny wrote.
Chico's did not immediately respond to a request for comment.
Chico's, which is known for its Soma brand of women's intimate apparel, operates more than 1,000 stores in the United States and Canada, and also sells its merchandise online.
The 36-year-old retailer, which has been struggling with lower sales for the last three years, has been looking for a new chief executive officer after Shelley Broader abruptly resigned in April.
Bonnie Brooks, the former chief executive of department store operator Hudson's Bay Co HBC.TO, has been serving as interim Chico's CEO since April.
(Reporting by Greg Roumeliotis in New York; editing by Jonathan Oatis)
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