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.
