Private equity firm Sycamore Partners has announced the acquisition of Chico’s FAS for a substantial one billion dollars, with the move to also see the apparel group become a privately held company upon completion of the transaction.

Shareholders at Chico’s will each receive 7.60 dollars per share in cash as part of the agreement, with the purchase price representing a 65 percent premium to the company’s closing stock price on September 27.

In a release, Chico’s chief executive officer and president, Molly Langenstein, said that the investment would drive the group’s expertise and strategic flexibility to fuel growth.

She added: "Sycamore Partners has an outstanding record in the retail industry in partnering with management teams to help businesses reach even greater levels of success.

“They share our commitment to providing solutions, building communities and creating memorable experiences to bring women confidence and joy. We look forward to working with the Sycamore Partners team to unlock Chico's FAS' full potential."

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The board of directors of the group, which operates the brands Chico’s, White House Black Market and Soma, approved of the acquisition “unanimously”, with the transaction now expected to close by the end of the first quarter in 2024.

When completed, Chico’s FAS common stock will no longer be listed on the New York Stock Exchange.

Commenting on the acquisition, chair of Chico’s board, Kevin Mansell, said: "The agreement with Sycamore Partners validates Chico's FAS's leadership as a customer led, product obsessed, digital first company with a strong record of operational excellence.

“The transaction reflects the Board's commitment to maximising shareholder value. It provides Chico's FAS shareholders with significant immediate cash value and creates exciting opportunities for employees of the company and our brands."

In its latest financial statement published towards the end of August, Chico’s lowered its outlook for the year amid declining sales, with the group now expecting net sales of between 2.145 billion dollars and 2.175 billion dollars, compared to previous guidance of between 2.175 billion dollars and 2.205 billion dollars.