Chico's has been increasing sales thanks largely to efforts such as its Passport Club, a loyalty program offering a 5% discount to those spending $500 at the store. Chico's counts 300,000 full Passport members and another 800,000 preliminary members. These customers account for 80% of Chico's sales and spend $135 on average per visit, vs. $82 for non-Passport customers. In addition to the Passport customers on its database, Chico's has amassed a list of 1.3 million targeted shoppers.
Every month, Chico's sends out catalogs, each with a discount coupon, allowing the company to track "almost down to the individual customer and how they are responding," Mr. Frain says. It's also launched in-house created print ads and TV spots.
Those lists also are used to help the company's real estate experts decide where to locate new stores, a big proposition for a fast-growing chain that built 58 stores in 2000 and plans more than 60 this year. Chico's sales rose 67% last year to $259 million; sales at stores open more than one year have been experiencing whopping increases, up 34% last year at a time when many of the nation's specialty retailers were grappling with negative year-over-year sales. "This year, we were supposed to tank," says Mr. Frain, pointing out that Chico's sales continue to be strong. "It's very satisfying and it doesn't get much better," he says.
Mr. Frain, 52, who started as an art student, got into retail for the same reason many students do: to get a discount.
In his first job, at New York's historic Paragon Sporting Goods, Mr. Frain worked in a newly opened backpack department. When the owner asked him to come up with some advertising, he decided not just to run a number of product names or pictures of items, but instead to focus on the historic store's most exotic product to show the depth of its merchandise. That was 1973, when Mr. Frain left the Pratt Institute and began a full-time retail career that has included work for some of the nation's top retailers, such as Laura Ashley, Alfred Dunhill and Gucci.