City Chic reports strong Christmas trading in solid first half
Plus-sized fashion brand City Chic has booked a solid first six months in FY19, its first half since it emerged as the only Specialty Fashion Group brand left standing after Millers, Katies, Crossroads, Autograph and Rivers, were sold to Noni B Limited for $32.2 million (AU$31 million) in June 2018.
The brand, now part of City Chic Collective, saw net profit after tax reach $10.5 million (AU$10.1 million), translating to an earnings per share of 5.5 cents per share (AU 5.3 cents), driven by 7 per cent sales revenue growth of $78.5 million (AU$75.4 million).
Comparable sales grew by 9.6 per cent over the period, with City Chic chief executive and managing director Phil Ryan stating stores are profitable and trading well, and that it has plans to expand the portfolio further across Australia and New Zealand.
“Trade was consistently strong throughout the half, including over the Christmas period,” City Chic chief executive and managing director Phil Ryan said.
“We have delivered excellent topline growth globally and at higher margins, due to a constant focus on our customer.”
City Chic grew its gross margin to 60.4 per cent, compared to the 59.4 per cent observed during 1H18.
Ryan noted that online is the brand’s most profitable channel, across both Australia and the United States. It now accounts for 40 per cent penetration with the platform.
In an interview with IR in December, Ryan said City Chic’s success online is due to the way the channel is viewed within the business.
“I don’t look at online as a different silo within our business… we don’t sit there and ask, ‘What’s our online channel doing?’ We ask, ‘How many people did we sell to this week?’, and then the second question is, ‘Where did they buy?’” Ryan said.
The brand offers a much broader range online than in bricks-and-mortar stores, which are restricted in size and restrictions inherent in a physical location, tailoring the in-store experience to the high-end of the product line, and keeping a more diverse range available on the website.
The brand’s comparable sales growth has continued to be positive into the beginning of the second half of FY19, and remains in line with expectations.