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

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 5 a.m. ET: 5,595,091 — Total deaths: 350,752 — Total recoveries — 2,300,985Map.
  2. U.S.: Total confirmed cases as of 5 a.m. ET: 1,681,418 — Total deaths: 98,929 — Total recoveries: 384,902 — Total tested: 14,907,041Map.
  3. Federal response: DOJ investigates meatpacking industry over soaring beef pricesMike Pence's press secretary returns to work.
  4. Congress: House Republicans to sue Nancy Pelosi in effort to block proxy voting.
  5. Tech: Twitter fact-checks Trump's tweets about mail-in voting for first timeGoogle to open offices July 6 for 10% of workers.
  6. Public health: Coronavirus antibodies could give "short-term immunity," CDC says, but more data is neededCDC releases guidance on when you can be around others after contracting the virus.
  7. What should I do? When you can be around others after contracting the coronavirus — Traveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 12 mins ago - Politics & Policy

When going back to work isn't safe

Illustration: Sarah Grillo/Axios

As states open up, businesses are starting to call their employees back to work, but many don’t feel safe going back.

Why it matters: This is poised to be the next big challenge in the American economy: workers may be forced to chose between their health and their livelihood.

Minneapolis unrest as hundreds protest death of George Floyd

Tear gas is fired as police clash with protesters demonstrating against the death of George Floyd outside the 3rd Precinct Police Precinct in Minneapolis, Minnesota, on Tuesday. Photo: Stephen Maturen/Getty Images

Minneapolis police used tear gas during clashes with protesters demonstrating Tuesday night over the death of George Floyd, an African American who died in police custody, according to multiple news reports and images shared to social media.

Driving the news: The FBI is investigating Floyd's death after video emerged of a Minneapolis police officer kneeling on his neck for several minutes, ignoring protests that he couldn't breathe. Hundreds of protesters attended the demonstration at the intersection where Floyd died, per the Guardian.