Soft consumer demand dents City Chic’s sales, fuelling loss
Global plus-size fashion retailer City Chic says sales declined 15.8 per cent in the June financial year driven by soft consumer demand in all markets.
For the 12 months to July 2, group sales were $268.4 million as demand remained volatile across its markets, despite a 12 per cent increase in the active customer base to 970,000. The company reported an operating loss of $45 million and an underlying loss of $24 million.
A strategic review launched in May has resulted in “significant progress” towards streamlining operations and driving down the company’s cost base.
As a result, the group sold its Evans business and exited the Europe, Middle East and Africa (EMEA) markets which allows the business to focus on the US – which it describes as “highly lucrative” – and solidifying its position in Australia.
Phil Ryan, CEO and MD of City Chic, said: “We have exited FY23 with a materially improved inventory position and have a clear strategy in place to return the business to profitability based on getting back to what we are good at.”
In the first eight weeks to August 27, the retailer has continued to clear winter inventory in Australia and New Zealand and its summer inventory in the US.
This resulted in sales declining 33 per cent compared to the previous corresponding period. In Australia-New Zealand, sales fell 34 per cent as the majority of EMEA stock was relocated to Australia, while in the US, sales fell 31 per cent with online performing better than partners.
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