Barington Capital Makes Demands of $CHS, Says Stock Can Trade to $27

Maybe Barington didn’t get the memo, which said ‘the mall is dead.’ In an absurd action by a 1.5% stakeholder, Barington Capital nominated a few people for Chico’s board, as well as stating that the company could do a better job (duh) and that the stock could trade up to $27, if they’d only follow their plan.

“Chico’s could more than double its earnings per share in three years, which we estimate could translate to a stock price of approximately $25 to $27 per share,” Barington’s founder, James Mitarotonda, wrote to Chico’s board chairman, David Walker, in a letter attached to a public filing.

Shares of Chico’s, which caters to older women, have fallen 33 percent over the last 12 months while the S&P 500 apparel retail index has dropped 0.2 percent in the same period. The stock closed at $11 on Wednesday.

Barington nominated Mitarotonda, who started his career at Bloomingdale’s and has made successful retail investments before, plus former Macy’s executive Janet Grove as directors. Chico’s nominated retail executives Bonnie Brooks, vice chairman of Hudson’s Bay Company, and Bill Simon.

Chico’s is a donut, in my humble opinion. Clothes that target 55 yr old women is a business model doomed for failure.