Something’s fishy in Ft. Myers…

January 9, 2009

Yesterday, Chico’s (CHS), a company I’ve known for quite some time because of its roots in Florida, announced that its 51 year-old CEO, Scott Edmonds, was “retiring”. Make that had retired the day before, according to the agreement attached to the 8K filed yesterday.

As the WSJ reports this morning, Chico’s had been under pressure from an activist group for awhile to replace Edmonds. Still, something isn’t quite adding up here. And it’s not just the sudden resignation nor the hefty $4.4 million in severance and the immediate vesting of options and restricted stock (the options, according to the chart in the filing are all underwater). While the filing includes the standard language that Edmond’s resignation “was not the result of any disagreement with the Company on any matter related to the Company’s operations, policies or practices” it’s hard to believe that Edmonds woke up on Wednesday and decided to pack it up.

As I footnoted in December 2007, back when Chico’s was trading at over $10 a share (still a far cry from its halcyon days in early 2006 when it was in the high 40s), Chico’s began to lose its way a few years ago. Even as I was aging and theoretically becoming their target customer, it was becoming harder and harder to find something to buy there and at some point, I stopped even going into their stores.

So while yesterday’s press release lauded Edmond’s service and his ability to transform Chico’s, he didn’t exactly do a bang-up job for shareholders, or for customers. And that’s why while it’s being called a retirement, it’s probably closer to the truth to call it a boot.

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