Chico’s CEO discusses the company’s attempt to reopen and what that looks like for laid off employees
Low stock prices and accusations of wrongdoing by employees recently laid off have been an issue at Chico’s FAS.
Lee County-based Chico’s said it’s experiencing one of the fastest turnarounds in fashion retail with three consecutive quarters of unprecedented growth and a 9.4% increase in sales from Q1 to Q4 of fiscal year 2019 prior to the COVID-19 pandemic. The company gives a lot of credit to the woman who will soon take over as CEO.
Chico’s closed every one of its more than 1,300 stores when the pandemic hit, but now the company is reopening in phases.
The headline locally is the deep cuts to the workforce in Lee County.
WINK News asked incoming CEO Molly Langenstein if the layoffs are directly due to COVID-19.
“No one had any business plan to be prepared for that. So we had no other choice at that time to do a reduction in force. Having to make that decision and suspending severance, and having to put people out of work is never a decision that any leader wants to make,” Langenstein said.
She said the company made the tough decision to let go of 20 percent of its staff, which is roughly 200 employees. She did say, however, if you were let go, to keep in touch with Chico’s and when things return to normal, you can be rehired.
She said she is confident the company will get through this, in part, because of all of the tough decisions they’ve had to make.
“We have done everything we can to mitigate expenses and costs to make sure that we have the cash flow that we need to be able to survive this,” Langenstein said.
Last year, Chico’s announced it was closing 250 stores around the country. When asked if that number was expected to now be higher, they said no.
While digital sales have increased exponentially, and Langenstein said it’s helping them make it through this pandemic, at the end of the day, people like the experience of shopping in a store, she said.
Langenstein wants the shareholders and loyal customers to know they will be able to weather the storm.
Langenstein said Chico’s will start reopening stores as soon as this week, following CDC guidelines.
WATCH more of the interview with Langenstein above.