SPECIAL REPORT
HOW CHICO’S BECAME
“CHANNEL-AGNOSTIC”

INTEGRATING STORE AND CONSUMER FULFILLMENT OPERATIONS IS
NEVER EASY—PARTICULARLY WHEN IT’S ALL DONE FROM THE SAME SITE.
HERE’S HOW CHICO’S PULLED IT OFF.

At women’s specialty retailer Chico’s FAS Inc., the walls have come a-tumbling down—the walls betweenbrick-and-mortar and e-commerce oper-
ations, that is. From the company’s perspective, a sale is a
sale regardless of how or where it takes place. “The lines
between store sales and online
sales have become irrevocably
blurred,” said Dave Dyer, the retail-
er’s CEO, in a recent call with ana-
lysts. “We are channel-agnostic at
Chico’s FAS.”
While that kind of thinking may
be very much in line with the real-
ities of today’s retail environment,
it can pose challenges for the back
end of the operation, particularly
order fulfillment. That’s especially
true for a company like Chico’s
that fills both direct-to-consumer
and store replenishment orders
from a single distribution com-
plex. To pull this off requires a lot of flexibility on the facili-
ty’s part. Basically, a distribution operation must either be
able to handle both kinds of orders at the same time or be
able to quickly shift back and forth between the two.

To cope with the challenges of multichannel distribution, Chico’s turned to automation. But not just any type of automation. The system Chico’s chose is a highly flexible setup featuring a sophisticated, high-capacity sorter that allows it to handle a different type of fulfillment on each side of the track.

CHALLENGED BY SALES GROWTH
Based in Fort Myers, Fla., Chico’s recorded $2.6 billion in
sales last year. The retailer of women’s clothing and fashion
accessories has four brands: Chico’s, White House/Black
Market, Soma Intimates, and Boston Proper, which it
acquired two years ago. The com-
pany has more than 1,350
women’s specialty stores through-
out the United States as well as the
U.S. Virgin Islands and Puerto Rico.
Those four brands are also sold
online.

The retailer currently has between 300 and 350 suppliers. A substantial portion of those contractors are based in Asia, although Chico’s does have suppliers in the Western Hemisphere and Europe. For the most part, merchandise is shipped to the United States via ocean, although the retailer occasionally uses air. From the point of entry in the United States, product is trucked to its two distribution facilities, both located in an industrial park in Winder, Ga., northeast of Atlanta.

Originally, the company operated only one distribution center in Winder – a 258,000-square-foot facility that handled both store replenishment and fulfillment of online orders for the Chico’s, White House/Black Market, and Soma Intimates brands. However, by 2009, sales volume had reached the point where it was straining the facility’s capac-