Chico’s FAS acquires Boston Proper for $205 million in cash

Chico’s FAS Inc. acquired Boston Proper Inc., a Boca Raton-based retailer, for $205 million in cash this morning. The acquired company generated $110 million in revenues in its 2010 fiscal year, up more than 10% from the prior year. Chico´s

announced that it generated more than $43 million in second quarter profits.

According to the official communication, Boston Proper will be “immediately accretive” to Chico’s’ earnings once the transaction closes, the firm says in a statement. The newly acquired company generated $110 million in revenues in its 2010 fiscal year, up more than 10% from the prior year. The buyer firm reiterated that it expects Boston Proper to be accretive to earnings in the first full year following this closure of the transaction before giving any consideration to potential synergies coming from various corporate activities including marketing, catalog circulation and merchandise sourcing.

Chico’s most recent quarterly profit total represents a 47% gain over last year’s second quarter, when the firm earned $30 million in net income. Total sales for the quarter were $551 million, up 18% over the year.

After using $205 million in cash to complete the purchase of Boston Proper, Chico’s will have roughly $300 million in cash and marketable securities left in its accounts, according to the financial update posted today.

The movement will bridge Chico´s way into women´s apparel as the Boca Raton, Florida based direct-to-consumer retailer, is a distinctive brand of female apparel and accessories. As previously disclosed, Boston Proper will operate as a stand-alone division within Chico's FAS.

Commenting on the completion of the Boston Proper acquisition, Chico's FAS president and CEO David F. Dyer said, "We appreciate the hard work that the Chico's FAS and Boston Proper teams put forth to complete this transaction in near record time. I see it as indicative as to how well Boston Proper fits with the Chico's FAS family of brands."

Finally, Chico announced that it is rescheduling its third quarter sales and earnings press release and conference call to Tuesday, November 22, 2011, before the opening of trading on the New York Stock Exchange that day to allow incorporation of Boston Proper's results.  

Angela González-Rodríguez