May 13, 2019

Sycamore Partners offers to buy retailer Chico's for $408 million

Sycamore Partners offered to buy women’s apparel retailer Chico’s FAS for $408 million, or $3.50 per share.

Why it matters: The price isn't just 5.4% lower than where Chico's stock closed on Thursday or 12% lower than where it closed on Friday. It's 18.6% less than the $4.30 per share offer that Chico's already rejected from Sycamore. Looks like someone's been eyeing the clearance rack.

  • Also: Sycamore disclosed a 6.6% position in Chico's, making it the New York-based company's fourth-largest outside shareholder. These "footholds" have become common for Sycamore, although still uncommon for private equity at-large.
  • The bottom line: "Chico’s net income plunged by almost two-thirds last fiscal year, while its stock has tumbled 60% in the past 12 months. ... Still, Chico’s has advantages. Unlike some of its peers left with unmanageable debt following leveraged buyouts, the company owes just $57.5 million, leaving more resources available for a turnaround," write Bloomberg's Lauren Coleman-Lochner and Jordyn Holman.

Go deeper: 7 major retailers have filed for bankruptcy in 2019

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The cost of going after Bloomberg

Illustration: Eniola Odetunde/Axios

Here's the growing dilemma for 2020 Democrats vying for a one-on-one showdown with frontrunner Bernie Sanders: Do they have the guts — and the money — to first stop Mike Bloomberg?

Why it matters: Joe Biden, Pete Buttigieg, Amy Klobuchar and Elizabeth Warren all must weigh the costs of punching Bloomberg where he looks most vulnerable: stop-and-frisk, charges of sexism, billionaire entitlement. The more zealous the attacks, the greater the risk he turns his campaign ATM against them.

How Trump’s economy stacks up

Source: "Presidents and US Economy", Trump figures through 2019 courtesy of Alan Blinder; Note: Data shows real GDP and Q1 growth in each term is attributed to the previous president; Chart: Axios Visuals

Average economic growth under President Trump has outpaced the growth under Barack Obama, but not all of his recent predecessors.

Why it matters: GDP is the most comprehensive economic scorecard — and something presidents, especially Trump, use as an example of success. And it's especially relevant since Trump is running for re-election on his economic record.

Coronavirus cases rise as 14 American evacuees infected

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

14 Americans evacuated from the Diamond Princess cruise ship tested positive for the novel coronavirus before being flown in a "specialist containment" on a plane repatriating U.S. citizens back home, the U.S. government said early Monday.

The big picture: COVID-19 has now killed at least 1,770 people and infected almost 70,000 others. Most cases and all but five of the deaths have occurred in mainland China. Taiwan confirmed its first death on Sunday, per multiple reports, in a 61-year-old man with underlying health conditions. Health officials were investigating how he became ill.

Go deeperArrowUpdated 2 hours ago - Health