SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
_________________
Date of Report: July 30, 2003
(Date of earliest event reported)
CHICO'S FAS, INC.
(Exact Name of Registrant as Specified in Charter)
Florida 0-21258 59-2389435
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(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
11215 Metro Parkway, Fort Myers, Florida 33912
(Address of Principal Executive Offices)
(239) 277-6200
(Registrant's telephone number, including area code)
Item 5. Other events.
On July 30, 2003, the registrant entered into a Stock Purchase
Agreement with The White House, Inc., all of the shareholders of The White
House (the "Sellers") and a Sellers' representative, pursuant to which the
registrant will purchase all of the outstanding shares of the Company's common
stock from the Sellers and The White House will become a wholly owned
subsidiary of the registrant. The purchase price for the transaction will be
approximately $90 million. Each of Richard Sarmiento, Chief Executive Officer
of The White House, and Patricia Darrow-Smith, Executive Vice President,
Merchandising, of The White House, will receive 80% of their consideration in
the form of cash and 20% of their consideration in the form of unregistered
common stock of the registrant, with certain piggyback registration rights;
the remaining Sellers will receive only cash consideration. Of the $90 million
purchase price, $12.5 million will be placed in an escrow for one year to
cover certain indemnification obligations of the Sellers.
Closing of the transaction is subject to the satisfaction of
customary closing conditions and regulatory review, including U.S. government
review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and obtaining required consents.
In connection with the closing of the transactions contemplated by
the Stock Purchase Agreement, the registrant will enter into Employment
Agreements with certain key employees of The White House, including, Mr.
Sarmiento, Ms. Darrow-Smith and F. Michael Smith, Vice President, Operations,
of The White House. The Employment Agreements with Mr. Sarmiento, Ms.
Darrow-Smith and Mr. Smith will be comparable to employment agreements
currently in effect for executive officers of the registrant.
On July 30, 2003, the registrant issued a press release regarding the
Stock Purchase Agreement. The press release is included herewith as Exhibit
99.1.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release issued on July 30, 2003 by the registrant with
respect to the registrant's announcement of the signing of a
definitive agreement to acquire The White House. This
exhibit is being furnished pursuant to Items 5 and 12 of
this Form 8-K.
Item 12. Results of Operation and Financial Condition.
On July 30, 2003, the registrant issued a press release commenting in
part on the impact that the acquisition of The White House might have on its
earnings outlook. The press release is included as Exhibit 99.1.
Signature
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CHICO'S FAS, INC.
Dated as of: July 30, 2003 By: /s/ Charles J. Kleman
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Name: Charles J. Kleman
Title: Executive Vice President,
Chief Financial Officer
EXHIBITS
99.1 Press release issued on July 30, 2003 by the registrant with respect
to the registrant's announcement of the signing of a definitive
agreement to acquire The White House.
Exhibit 99.1
[GRAPHIC OMITTED]
Executive Contact: Investor / Media Contacts:
Charlie Kleman Executive VP, James Palczynski
Chief Financial Officer Investor Relations
Chico's FAS, Inc.(239) 274-4425 Megan McDonnell
Media Relations
Integrated Corporate Relations, Inc.
(203) 222-9013
CHICO'S FAS, INC. SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
THE WHITE HOUSE, INC.
-- $90 Million Cash and Stock Deal Expected to be Immediately Accretive --
-- White House|Black Market Stores Seen as Promising Growth Vehicle --
-- The White House, Inc. Currently Operates 103 Stores in 30 States --
FORT MYERS, Fla. - July 31, 2003 - Chico's FAS, Inc. (NYSE: CHS) announced
today that it has signed a definitive agreement to purchase The White House,
Inc., a privately held specialty retailer offering distinctive private label
women's apparel. The White House, Inc. currently operates 103 stores in 30
states, the Virgin Islands, Puerto Rico and the District of Columbia that sell
high-quality fashion and basic merchandise assorted primarily in the classic
and timeless colors of white and black and related shades.
The total purchase price for The White House, Inc. will be $90 million, plus
associated expenses. The Company will pay for this acquisition with
approximately $85.6 million in cash and $4.4 million in Chico's common stock,
or approximately 176,000 shares. The transaction has been approved by the
boards of directors of Chico's and The White House, Inc. and is anticipated to
close in the third quarter of 2003.
Scott A. Edmonds, President and Chief Operating Officer of Chico's FAS, Inc.
commented, "We are very pleased to bring these two companies together. Over the
past few years, we have been impressed with the development of the White
House|Black Market concept and have built a strong relationship with Rick
Sarmiento, The White House's founder, and his senior management team. It is
clear to us The White House has a proven store model and we are convinced that
there should be a tremendous fit with our organization from a strategic,
financial, cultural, and operational viewpoint. Our superior access to capital
as well as our operational and marketing expertise combined with their strong
merchandising philosophy and highly compelling opportunity for store expansion
should benefit women consumers across the country and provide enhanced value
for our shareholders."
Richard Sarmiento, Chairman, President and Chief Executive Officer of The White
House, Inc. said, "Although we had recently been pursuing our own public
offering, we are extremely excited to open new avenues for the White
House|Black Market concept by becoming a part of the Chico's organization. We
believe that the benefits this transaction will provide to The White House
should be immediate. It has become increasingly apparent over the past few
years that the Chico's team has an intuitive understanding of the specialty
apparel market. Chico's has built a world-class operational platform that The
White House should be able to leverage to effectively execute our growth plan.
We look forward to this new affiliation and to being able to take advantage of
the opportunities that lie ahead of us."
Chico's anticipates that the acquisition will be slightly accretive in its
first full year without giving any consideration to potential synergies between
these two highly complementary businesses, and before any initial write offs
that may be associated with the integration of the two organizations.
Management expects the acquisition to add sales in the range of $32 to $36
million for the remainder of fiscal 2003 based on a closing in September and
the planned opening of 8 new White House|Black Market stores during the
remainder of this fiscal year. Management expects the acquisition of The White
House, Inc. will contribute between $100 and $110 million of revenues, based on
the opening of between 25 and 30 new White House|Black Market stores, next
year.
Consummation of this transaction is subject to customary closing conditions and
regulatory review, including U.S. government review under the Hart-Scott-Rodino
Premerger Notification Act. Chico's was advised on the transaction by Peter J.
Solomon Company.
Mr. Edmonds concluded, "We are excited to welcome Rick Sarmiento, who will
continue to head up the operations of White House|Black Market, and The White
House management team to our organization. We believe that they operate with a
philosophy, business acumen, and customer service orientation very similar to
our own. We could not have asked for a better fit than this acquisition and we
believe that the future for our combined organization holds great promise."
Chico's will hold a special investors' conference call on July 31, 2003, at
10:30 a.m. EST to discuss the acquisition and answer investor questions.
Interested parties should call (706) 679-7935; the passcode for the call is
CHICOS. You may also access this call via the Internet at www.chicos.com. A
replay of the call will be available through August 7th and can be accessed by
dialing (706) 645-9291. The passcode for the replay is 2078001. A replay can
also be accessed at the company's web site at www.chicos.com.
About Chico's FAS, Inc.
Chico's sells exclusively designed, private-label women's clothing and related
accessories. The Company operates 413 women's specialty stores, under the name
of Chico's and Pazo, in 42 states and the District of Columbia. The Company
owns 371 Chico's front-line stores, 20 Chico's outlet stores and 10 Pazo
stores; franchisees own and operate 12 Chico's stores.
About The White House, Inc.
The White House, Inc. sells private-label women's clothing and related
accessories under the White House|Black Market label. The Company owns and
operates 103 women's specialty stores, under the White House and Black Market
names. The Company owns 99 White House|Black Market dual concept stores and 4
White House or Black Market single concept stores.
Some statements in this press release include forward-looking statements
regarding future results or financial performance of Chico's FAS, Inc. and The
White House, Inc., including, but not limited to, statements regarding the
possible impact of the pending White House|Black Market acquisition and the
addition of the White House|Black Market store concept to the Chico's family.
Such statements are merely predictions and involve risks and uncertainties such
that actual results and performance may differ materially. Factors that might
cause such a difference include, but are not limited to, risks associated with
integrating an acquired company into Chico's, increasing the number of White
House|Black Market locations, continued acceptance of the product offerings by
the White House|Black Market target customer, Chico's inability to compete
successfully in the highly competitive specialty retail market, failure to
retain key employees, increased competition and general economic conditions.
These and other risks are set forth in Chico's periodic reports that are filed
with the Securities and Exchange Commission, including Chico's annual report on
Form 10-K for the fiscal year ended February 1, 2003 and are also set forth in
the section entitled "Risk Factors" in Amendment No. 1 to the Registration
Statement on Form S-1 filed by The White House with the Securities and Exchange
Commission on June 24, 2003. All information included in this press release
regarding The White House was provided to Chico's by The White House, and
Chico's assumes no liability for such information. Chico's FAS, Inc. and The
White House, Inc. undertake no obligation to update or revise forward looking
statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results.
A copy of a slide show addressing Chico's recent financial results and current
plans for expansion is available on the Chico's website at www.chicos.com in
the investor relations section. The plans for expansion in the slide show do
not take into account the potential acquisition of The White House, Inc.
Additional investor information on Chico's FAS, Inc. or The White House, Inc. is
available free of charge on the Chico's or White House websites at
www.chicos.com and www.whiteandblack.com