This emphasis is not only a reflection of growth in the overall intimate apparel business, but also of its particular application to Chico's core customer. The overall intimate apparel business grew 3% to reach $11 billion in 2005, according to Chuck Nesbitt, EVP and COO of Chico's, and was split 75% daywear and foundation garments and 25% sleepwear.

However, the Chico's demographic of $75,000-plus annual household income and 35- to 55-year olds, spends more on sleepwear. That customer's sleepwear purchases are growing at 8% a year, Nesbitt said during the retail company's 6th annual analyst & institution day event at its headquarters here on Friday.

In addition, "everything about Victoria's Secret is driving toward a younger customer," Nesbitt said, "and department stores are under-performing with our target customer. The departments are over-assorted, provide limited service; the merchandise selection is very poor and frequently out of stock. The fashion opportunity (in those stores) is very limited, particularly for the mature customer."

He acknowledged that intimate apparel is a "difficult business," citing a fragmented raw material chain of supply and long lead times. "It has high brand loyalty, especially among the more mature buyer," he added, noting that while that made it difficult for a new brand to succeed, it would also work to the benefit of a retailer that provided function and fashion over time.

"Our customer is a significant spender," he added. "We think if we can get her into Soma, she'll spend even more." He also said the intimate apparel customer shops twice a year, "and it is a planned purchase." The Soma strategy is to "move her from pure replenishment to impulse and a great shopping experience."

The economies of intimate apparel retailing gain significantly on a base of 100 stores, he acknowledged. So, in addition to the planned new Soma units and "a smaller, 1,100-sf footprint in some Soma stores," the company plans a direct selling push, primarily through "the ultimate intimate apparel virtual store." The website, he suggested, "will build demand ahead of store expansion." Chico's launched Soma by Chico's in August 2004.

Across its four brands, the company plans to expand overall square footage by 30% this year and 20% every year thereafter, according to Scott A. Edmonds, president and CEO. That includes 60 new Chico's units and 70 White House Black Market units in addition to Soma. Plans for Fitigues, which the company acquired just two weeks ago, are under review.

The corporate strategy, Edmonds said, is to "expand the reach of all four brands to new markets and within markets in which they already operate." During 2005, Chico's sales alone breached the $1-billion mark, and total sales were $1.4 billion.

New categories and expanded categories are in store for Chico's, which just added sunglasses to its growing line of accessories. Giftware is slated for growth along with "regional opportunities," such as more cold-weather outerwear and more hot-weather product for climates where it's warm year-round, plus more urban suiting. Merchandisers also see additional opportunity in activewear and in bottoms.

On Jan. 30, Chico's FAS acquired most of the assets of Fitigues, which will operate as a new branded division. Scottsdale, AZ-based Fitigues describes its line as "luxurious, relaxed, comfortable athletic apparel," which it sells through 14 free-standing stores and a catalog. Chico's acquired 12 of the 14 units, and Fitigues' founders, Steve and Andi Rosenstein, retain two.

"We believe this brand appeals to an affluent customer, similar in age and income to our White House Black Market customer, but in a more luxurious casual way," Edmonds said in a statement at the time of the acquisition. "By bringing Fitigues under the Chico's umbrella, we can provide the necessary capital, back office operations assistance, and leverage needed to successfully expand this brand across America over the next several years."

Chico's FAS Inc.'s January 2006 comp-store sales were up 14.6%, and overall sales reached $91.7 million, up 34.2% versus the same month a year ago. In all, the company now operates 778 women's special stores in 47 states, Washington DC, Puerto Rico and the Virgin Islands. It owns 501 Chico's stores, 31 Chico's outlet units, 197 White House Black Market stores, eight White House Black Market outlet units, 15 Soma by Chico's, 11 Fitigues stores, one Fitigues outlet unit, and franchisees own and operate 14 Chico's stores.