The share price of Australian retailer City Chic Collective Ltd (ASX:CCX) has been on a tear so far this year. Shares in the clothing company have already soared more than 25% higher in 2021 (opening today at $5.12).
This continues an impressive period for City Chic: since the COVID-19 selloff last March, City Chic shares have skyrocketed almost 400%, recently touching an all-time high price of $5.60.
City Chic is a plus-size women’s clothing retailer, specialising in high street fashion for women with more natural body types. The company offers premium fashion choices – from shoes and dresses to lingerie and sleepwear – for women sized 14-24.
While still headquartered in Sydney, the company has significantly expanded overseas during the last few years.
Back in October 2019, City Chic acquired the eCommerce assets of US-based plus-size women’s retailer Avenue for US$16.5 million. Then, in December 2020, City Chic acquired the eCommerce and Wholesale assets of UK high street brand Evans for £23.1 million.
In fact, City Chic has been so successful overseas that 45% of its first-half FY21 sales came from the northern hemisphere.
The company became an unlikely success story to emerge out of the pandemic after massive jumps in online and international sales sent its share price soaring.
Although retail was seen as one of the sectors hit hardest by lockdowns imposed throughout 2020, many companies with a strong digital presence actually saw a spike in sales. For example, online furniture retailer Temple & Webster Group Ltd (ASX: TPW) became a surprise COVID market darling after its FY20 revenues jumped a whopping 74% year-on-year.
City Chic also pivoted strongly towards online sales during FY20, supported by the – in hindsight, quite timely – acquisition of Avenue’s eCommerce assets. Online sales doubled in FY20 and accounted for 65% of all sales made during the year.
And that trend has continued into FY21. Online sales made up 73% of City Chic’s total first-half FY21 sales.
The company’s growing presence internationally also helped see it through the worst of the pandemic.
For example, City Chic’s FY20 sales dropped by 4.8% year-on-year in Australia and New Zealand due to COVID lockdowns. But a 179% surge in sales in the northern hemisphere (most of it online) meant the company still delivered overall top-line revenue growth of 30% for the year.
Recent Financials & Outlook
City Chic delivered strong interim FY21 results. Revenues increased by almost 14% (to $119 million) versus the prior comparative period and statutory net profit after tax jumped nearly 25% to $13.1 million.
Active customer numbers also continued to increase at a decent gallop, up 56% year-on-year to a touch over 800,000. City Chic didn’t commit to any firm earnings guidance in either its interim results announcement or investor presentation, but the company did hint that it was seeing continued strong sales growth over the second half.
City Chic also reiterated its short-term objectives, which included integrating the Evans brand into its UK portfolio and ramping up marketing investment to further drive customer growth.