Plus size retailer City Chic has reported a 9 per cent fall in revenue for the first eight weeks of FY25, nearly 20 per cent better than its full year sales slump of FY24.
The brand's comparable store sales were up 9.9 per cent, while its total store sales were flat with 11 fewer stores compared to the same time last year.
City Chic has also reported a 28 per cent lift in gross margin in the first eight weeks, with gross margin as a percentage of sales up 17.7 percentage points to 61.3 per cent.
There was also a 58.2 per cent lift in its average selling price to $58.30.
These new financial year results are a stark improvement on FY24 that just passed, with City Chic’s full-year revenue down 28.3 per cent to $131.6 million.
City Chic CEO and managing director Phil Ryan said the lifts in metrics for the new year are driven by new product ranges that are resonating well with customers.
“Compared with the same period last year when we were heavily discounting to clear stock, trading revenue is down just 9.1 per cent, with comparable physical stores recovering well with sales up 9.9 per cent,” Ryan said.
“I am confident the business will return to demand-driven growth, as our 481,000 customer base remains engaged, with our NPS [net promoter score] at 72.”
Looking ahead, Ryan said the team is targeting revenue of $142-$160 million, with earnings before interest, tax, depreciation and amortisation (EBITDA) to hit between $11-$18 million in FY25.
“We have a stronger balance sheet following the divestment of Avenue and the Equity Raise, and with our right-sized cost base and improved operational flexibility we are well placed to return to sustainable, profitable growth.”
The recent improvements follows a stark turnaround in FY24 for the plus size retailer. This includes an underlying EBITDA loss of $8.4 million, which was an improvement of 47.3 per cent on FY24, and 9.8 per cent ahead of forecasts.
Inventory was down 42.8 per cent to $30.7 million as at June 30, 2024, with City Chic citing the sale of Avenue, improved inventory management and sell-through.
City Chic’s net cash position was $3.9 million as at June 30, with the recent business restructure expected to deliver $20.3 million in costs savings with 85 per cent of initiatives implemented so far.
“The result for FY24 reflects a year of business transformation, including decisive actions that were taken to streamline the business and focus on our high-value City Chic customer base and product mix in ANZ and the US,” Ryan said.
“The divestment of Avenue enabled us to simplify our brand portfolio and refocus on what we do best - delivering high-quality, on-trend products that our customers love.
“In the latter part of FY24 we saw strong positive momentum in Average Selling Price (ASP) and Gross Margin contribution as inventory returned to appropriate levels and new product has been introduced. In addition, we have delivered a material reduction in operating costs to align with demand.”
Regarding FY24 revenue, Australia and New Zealand sales were down 30.8 per cent to $97.7 million. Comparable stores were down 15 per cent, with strong improvement in the fourth quarter which was only down 5 per cent, City Chic reported, performing at higher margins.
ANZ online sales were down 38.3 per cent.
In America, revenue hit $33.9 million, which was down 20 per cent on the prior year, driven by inventory clearance in the first half, and warehouse movements in the second, which City Chic noted are now complete.
Revenue across partners was around $22.7 million, with this included in regional revenue above. Partners revenue was down 7.7 per cent, however US partners were up 15 per cent in the second half, with Amazon outperforming as a partner in FY24, and a strong first 6 months with Macy’s new marketplace.