Diane Ellis to Step Down as Chico's Brand President
Chico's FAS announced yesterday that Diane Ellis, president of the Chico's brand, will depart the company Nov. 30. The company has initiated a search to identify Ellis’ replacement. In the interim, the Chico's brand will be led by Shelley Broader, Chico's FAS CEO and president. "We're committed to improving the performance of our Chico's brand, and we believe this leadership transition and the merchandising and marketing changes underway, as separately announced today, are necessary to reinvigorate broad-based consumer excitement and growth for the brand," said Broader, in a statement. "We appreciate Diane's dedicated service over the last two years and wish her the best."
Total Retail's Take: While Chico's FAS didn't offer a specific reason for Ellis’ departure, I'm sure the brand's recent sales declines factored into the decision. Chico's net income in its most recent quarter fell to $6.5 million from $16.7 million in the year-ago quarter. The sales decline was driven by a decrease in transaction count and lower average year-over-year dollar sales, mostly at the flagship Chico's brand. Store comps at Chico's fell 10.2 percent, while White House Black Market fell 5.1 percent and at Soma lingerie rose 2.4 percent. Fortune said the sales drop is most likely due to the fact that the Chico's brand has been moving away from its transitional, older clientele to reach millennials. This is a mistake seen often in retail: An established retailer with an aging clientele goes after younger shoppers, believing it can instantly change its image in those consumers’ minds and neglect its core shopper. Fortune compared Chico's experience to J.C. Penney’s ill-fated, ill-conceived and ill-executed reinvention in 2012, when it basically rejected its longtime customers hoping to quickly replace them with younger shoppers less interested in discounts.