City Chic share price falls on coronavirus update

The City Chic Collective Ltd (ASX: CCX) share price is trading lower after the ASX retailer released a trading update on how it is responding to the coronavirus crisis.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The City Chic Collective Ltd (ASX: CCX) share price is trading lower this morning after the ASX retailer released a trading update on how it is responding to the coronavirus crisis.

This announcement comes as City Chic shares suffered heavy losses yesterday closing 16% lower, on the back of heavy falls over the past few weeks.

City Chic is a multichannel retailer that offers fashion-forward women a range of clothing, accessory and footwear options.

Solid sales to date but future sales uncertain

City Chic noted in its release today that its comparable sales for the year to date has shown strong growth of 8.6%. However, the company acknowledges that due to the tight restrictions imposed in order to combat the virus, global spending is now being impacted. The company further added that it is unclear at this stage as to how much its financial performance for the rest of the year will be impacted.

On a positive note, City Chic commented that over the past month, it has successfully worked with its Chinese supply partners and has re-established a stable supply chain after the recent disruption caused by the impact of the coronavirus in China.

City Chic also added that since the release of its results for the half-year to December 2019, it has been able to strengthen its financial position by successfully refinancing its existing $17.5 million debt facility to a larger one totalling $35 million that extends for a 3 year period.

Strong online sales channel

City Chic noted that since it acquired the e-commerce assets of Avenue Stores, approximately two-thirds of its global sales have been through the online channel. This, City Chic believes, will help it get through the challenges in the weeks or possibly months ahead if there is a significant reduction in customers in its physical stores. The company will be looking to capitalise on its online channel in the months to come.

Other ASX retailers hit hard recently

City Chic is not the only Australian retailer that has seen heavy falls over the past few days.

Jewellery and accessory retailer Lovisa Holdings Ltd (ASX: LOV) took a massive 25% hit to its share price yesterday and is falling further today after releasing a trading update of its own this morning.

Premier Investments Limited (ASX: PMV), which operates a number of specialty retail brands such as Smiggle and Peter Alexander, saw its shares goes down by 12% yesterday.

Motley Fool contributor Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Retail Shares

A man eases back onto his sofa, happy with the relaxed vibe from his furniture.
Retail Shares

Why I just sold half my shares in this ASX 300 stock even though I still love it!

I’m still a big fan of this business.

Read more »

Two fashionable asx investors dancing among confetti.
Retail Shares

2 'very high-quality' ASX retail shares with significant inside ownership

A fund manager has named two appealing stocks to own.

Read more »

A man sits on a bench atop a mountain with a laptop, making investments with a green ESG mind.
Earnings Results

ASX All Ords stock KMD tumbles as interim dividend cancelled

Investors are hitting the sell button on ASX All Ords stock KMD today.

Read more »

Close-up Of Empty Shopping Cart Near Person's Hand Using Calculator Over White Desk
Retail Shares

Better buy: Coles or Woolworths stock?

Which stock should go in the shopping basket?

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Retail Shares

Why did Super Retail shares drop after going ex-dividend?

This is the story behind the decline.

Read more »

Happy couple doing online shopping.
Opinions

Is it too late to buy after the Kogan share price rocketed 90% in a year?

Is this online retailer still an investment opportunity?

Read more »

Two people comparing and analysing material.
Retail Shares

Better buy in March 2024: Wesfarmers stock vs JB Hi-Fi stock

Which of these two retail heavyweights would be a better buy?

Read more »

A man eases back onto his sofa, happy with the relaxed vibe from his furniture.
Share Gainers

If you'd put $30,000 in this ASX retail stock 11 months ago, you'd have $116,000 now

When battered stocks make a comeback, it happens very quickly. Here's a prime example.

Read more »