City Chic has continued its international expansion, announcing that it has acquired European plus-size, eCommerce retailer Navabi for AUD$9.6 million in cash.
The eTailer is the latest in a string of international acquisitions City Chic has made in the past two years, acquiring Avenue in 2019 and Evans in 2020.
Signing the deal on July 23, City Chic acquired 100% of the shares in Navabi, including all assets and liabilities of the company.
Navabi's assets include €2.1 million of cash net of tax liabilities.
The business' inventory has also been depleted by the pandemic, with City Chic set to rebuild it to a commercial level over the next six months.
In 2020, Navabi generated AUD$16.6 million in sales revenue and clocked 5.8 million website visits.
Prior to the pandemic, annual traffic to the site exceeded 10 million visits.
Speaking on the acquisition, City Chic CEO and MD Phil Ryan said that the purchase is in line with its international expansion strategy.
"Navabi is an exciting strategic opportunity, giving us a great foothold in the €40 billion European plus-size market, which is the next key geography in driving towards our vision to lead a world of curves.
"Over the past decade we have followed Navabi as it has built a strong online marketplace for plus-size brands.
"The Navabi customer has the same emotional connection that has driven our success, and we are excited to introduce our brands to this European customer base.
"The acquisition is in line with our tried and tested strategy of increasing our global digital customer base and driving profitable revenue growth," he said.
The acquisition will be funded by City Chic's existing cash balance, which was at AUD$71.5 million at June 27.
Trading update
Meanwhile, the business has also unveiled its unaudited FY21 result and trading update.
The retailer delivered a sales revenue increase of 32.9% to $258 million for FY21, with comparable sales growth of 31.6%.
Underlying EBITDA is expected to be in the range of $42 million and $42.5 million, representing 58-60% growth on FY20.
The business has reported that trading in FY22 to date has exceeded budget, with strong performances in the UK and US outweighing the negative impact from store closures in Australia.
City Chic will release its audited FY21 results on August 26 2021.