City Chic posts “pleasing result” from first year as a standalone business

Plus-size women’s fashion brand City Chic has reported a strong FY19 driven by topline sales growth and underlying EBITDA margin expansion.

Sales revenue increased 12.6 per cent to $148.4 million, in line with comparable sales growth of 12.2 per cent.

Online sales now make up 44 per cent of total sales, thanks to strong e-commerce growth in Australia and New Zealand and the US, where City Chic operates solely online and a wholesale basis.

The company reported an underlying EBITDA of $24.9 million, a 25 per cent increase year on year, with an underlying EBITDA margin of 16.8 per cent, up from 15.1 per cent in FY18.

Gross profit margin margin dipped slightly from 59 per cent in FY18 to 57.8 per cent this year, primarily due to the growth of City Chic’s online and wholesale businesses, traditionally less profitable channels.

The retailer reduced its cost of doing business to 41.3 per cent of sales from 44.1 per cent in the prior corresponding period, following the closure of less profitable concessions, including in Myer stores.

City Chic ended FY19 with a net cash position of $23.2 million and no debt. There are some legacy liabilities associated with its divestment of the Katies, Millers Crossroads, Autograph and Rivers brands, which Noni B acquired in 2018, that have yet to be paid, as well as a tax bill on the proceeds of the sale of those brands.

The City Chic board has declared a fully franked final ordinary dividend of 1.5 cents per cents per share, which will be paid on September 30.

More to come.

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