City Chic seeking more international acquisitions
In response to media speculation that it is in talks to buy its next struggling US business, plus-sized retailer City Chic has said such a maneuver fits within its international growth strategy.
“There has been no agreement on the terms of any possible acquisition, nor is there any certainty that any such agreement will be reached or that any acquisition will be made,” City Chic said in a statement on the ASX.
“Accordingly, these opportunities are not regarded as sufficiently advanced to warrant any further disclosure at this time.”
The response came after the AFR reported that a deal was underway, though City Chic was still searching for its target, and that the retailer is considering an equity raising in order to help facilitate the acquisition.
The move echoes the $16.5 million purchase of US specialty retailer Avenue last October, which brought the collapsed business out of chapter 11 bankruptcy and expanded City Chic’s US e-commerce presence.
“[Avenue’s] acquisition delivers on our vision of ‘leading a world of curves’. It means that City Chic now has a portfolio, or a collective, of online business that we can leverage to further build our Northern Hemisphere presence,” City Chic chief executive Phil Ryan said in October.
Additionally, City Chic purchases US online plus-size intimates brand Hips & Curves for $2 million in April 2019.
Alongside its growing online presence, City Chic recently downsized its bricks-and-mortar presence in Australia – shuttering 14 stores across the country as rent negotiations broke down.
Ryan said the closures didn’t signal a move away from bricks-and-mortar retailing, and that the business remained committed to open new stores where deals can be structured to reflect the reality of physical retail in 2020.
However, the store closures also partly reflect the shifting tide of online shopping, Ryan said, with City Chic focusing on connecting with customers across multiple touchpoints and executing on its digital strategy.
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