City Chic Collective (ASX:CCX): Is there any hope of a return to the glory days for the plus size fashion retailer?

City Chic Collective (ASX:CCX) shareholders who bought in late 2021 and have held the stock since would have seen just about all of their investment wiped out – with the share price down from $6 to less than 10c now. Such a decline would suggest the company had evolved into a shadow of its former self and that is just what happened.

History of City Chic Collective (ASX:CCX)

City Chic is a plus size fashion retailer. It was founded in 1992 as Miller’s Retail, then becoming Specialty Fashion Group in 2006.

In 2018, it made a strategic pivot, adopting its current name and focusing on plus-size retailing (particularly online). It sold off a number of fashion brands (including Miller’s and Katies to Noni B which would become Mosaic Brands) and acquired Avenue Stores in 2019, Evans in 2020 and Navabi in 2021 from the US, Britain and Germany respectively. It paid ~$75m for these 3 businesses and thought this would pay for itself over time as it provided a launchpad into overseas markets.

A lot can change in 4 years

Mid-2021 was a very different time. The past 12 months had been volatile with on and off lockdowns, a lack of ability to spend money on travel and a huge surge in shopping online. It is in this context that you need to understand the situation City Chic was in.

In mid-2021, CCX reported revenue of $258.5m, representing 32% growth, $42.4m underlying EBITDA (60% growth and a 16% margin) and a profit of $21.6m (up 135%). Then CEO Phil Ryan declared that,’ Our strategic vision to lead a world of curves has taken a huge step in the last twelve months’.

CCX declined over the next few years as conditions returned to normal and the company did not see the returns on investment it made. Excess inventory built up over time, and margins returned to the typical low levels you see in the retail industry. The company did manage a better result in FY22 with $369.2m sales and a $22.3m profit, plus it had 1.4m active customers. In just 12 months things turned around. In FY23, it made $268.4m revenue (down 16%) and a $45m loss from continuing operations.

It had $53.8m in inventory (down from a peak of $170m in December 2022) and it announced it was selling the Evans brand, which it did for $15.5m. Later on, it would sell Avenue Stores to FullBeauty Brands for A$18m and it closed down Navabi.

Buying the dip but the dip keeps dipping

What has soured investors is that the company promised it was taking steps to turn things around like consolidating its suppliers and focusing on higher value products.

In FY24, CCX recorded $131.6m which was barely half of FY23. And even if you adjust the figure for discontinued operations, it still down 28% from what it would have been in FY23 if just continuing operations were included.

City Chic made a $38.4m loss from continuing operations. The company boasted it had 56% online penetration, website and online marketplace sales as a percentage of sales. But this means lower margins as online sales are lower margin.

In 1H25, its revenue was $69.5m, down 3.6% on 1H24. Only weeks after these results, the Trump tariffs saga blew up and rattled the markets. City Chic sources over 90% of its products so China, so it is firmly in the front line. The company told investors it bought the bulk of its Summer 2025 and some of its Winter 2026 product into the USA in anticipation of this. CCX said this would allow further time to plan and has paused all further stock entering the US market.

Is there hope now?

Earlier this week, CCX released unaudited results for FY25. It boasted it made $134.7m in unaudited revenue for FY25, up 2% but below previous guidance of $137-147m. The company did not give an unaudited bottom line but claimed to have made $6-6.5m EBITDA and to have $8m cash, plus $5m remaining undrawn from its $10m debt facility.

It claimed that a recently opened store in Sydney’s Weatherill Park was positively received by investors, and it restarted limited purchasing in the USA to replenish best sellers and deliver newness.

The company may not be at risk of collapse any time soon, but it is a shadow of its former self. All listed stocks can be impacted by factors out of their control, but if you fail to respond adequatly (or at all) then you’ll make it worse on yourself and your investors.

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