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UPDATE 1-Activist fund Barington pushes for change at Chico's, again

(Updates with share price, statement from Chico's)

By Svea Herbst-Bayliss

BOSTON, June 7 (Reuters) - Activist investor Barington Capital Group on Monday urged Chico's FAS to explore strategic options for its brands and said the apparel chain's board should add new members to help improve its lagging stock price.

The New York-based hedge fund, which first pushed for changes at the clothing company five years ago, said it wants to see directors with experience in digital commerce, merchandising and marketing and women's fashion specialty retail.

"We believe the Board has been highly deficient in these two areas for years," Barington's founder, James Mitarotonda, wrote in a letter to the board which was made public on Monday.

"The Chico's Board is largely responsible for this underperformance," he said about the company's share price, stressing that "change is needed at the Chico's Board."

The company said it has been making progress in its turnaround strategy and will present details when it reports first quarter earnings on Tuesday. "We are committed to taking all appropriate actions to improve performance and drive shareholder value," it said in a statement.

The hedge fund, which said it owns roughly 2% of the shares, is urging directors John Mahoney, David Walker and Stephen Watson to step down, criticizing them for a lack of relevant expertise and for having endorsed a former chief executive's "failed strategic plan."

Mitarotonda also expressed concern about board member Kevin Mansell, citing his close ties to Watson when both men were involved at retailer Kohl's.

The company is expected to hold an annual meeting on June 24.

While Mitarotonda praised Molly Langenstein, who was named chief executive last year, he said he wants the board to look at strategic alternatives, "that will unlock the tremendous value we see in the Soma brand in light of the pace of recovery at the Chico’s and WHBM (White House Black Market) brands."

Chico's stock price jumped 6.88% on Monday to $5.75, and has surged more than 240% since January. The last time Mitarotonda was involved, he forecast that with changes, the stock price could trade closer to $27 a share. (Reporting by Svea Herbst-Bayliss Editing by Bernadette Baum and Richard Pullin)