Will Sears Store Closings Affect Chico FAS Shareholders?

On Tuesday, Sears Holdings Corp. (NASDAQ:SHLD) announced it will be closing between 100 and 120 stores across the nation.  It was the latest sign that consumers are becoming more selective with their shopping.  Other retailers such as Best Buy (NYSE:BBY), J.C. Penny and Macy’s (NYSE:M) continue to compete for consumers by lowering prices and shrinking margins.  However, some institutions are placing bets on a consumer led economic recovery.

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Chico’s FAS Inc. (NYSE:CHS) sells private label women’s casual clothing and related accessories throughout the United States. The Company’s clothing includes tops, pants, shorts, skirts, and dresses.  Although shares have surged 156 percent in the past three years, shares are down 7.5 percent year-to-date.  The pullback has offered a buying opportunity for several money management institutions.

According to SEC data, Blue Harbour Group, LP added a new position of 448,830 Chico’s shares in the third quarter.  The investment group did not have a position prior to the third quarter, and it was the largest increase in shares among money managers.  Perimeter Capital Partners, LLC and Liberty Mutual Group Asset Management Inc. also added 401,836 and 388,345 shares, respectively.  Rounding out the list are Texas Permanent School Fund and Two Sigma Investments LLC which added 218,080 and 196,747 shares, respectively.

Despite big money making moves into shares of Chico’s, there was no insider buying at Chico’s in the third quarter.  Many investors are still concerned about the economic recovery.  “It’s not going to be a gangbusters Christmas,” said Chris Christopher, an IHS Global Insight economist. “People are not doing that well. What’s happening with personal income and consumption is disheartening.”  Personal spending climbed just 0.1 percent last month, while wages and salaries fell 0.1 percent from October, according to the Commerce Department.

Chico’s Competitors to Watch: Coldwater Creek Inc. (NASDAQ:CWTR), Limited Brands, Inc. (NYSE:LTD), Ann Inc (NYSE:ANN), The Talbots, Inc. (NYSE:TLB), Christopher & Banks Corp. (NYSE:CBK), Ascena Retail Group Inc (NASDAQ:ASNA), Charming Shoppes, Inc. (NASDAQ:CHRS), New York & Company, Inc. (NYSE:NWY), The Cato Corporation (NYSE:CATO), Nordstrom (NYSE:JWN), J.C. Penney (NYSE:JCP), Macy’s (NYSE:M), Saks (NYSE:SKS), and Body Central Acquisition Corp. (NASDAQ:BODY).