City Chic enters Europe with third plus-sized buy in two years


City Chic is better placed than most retailers to deal with lockdowns, because 80 per cent of its sales come from online.

City Chic is the largest plus-size retailer in Australia, with global sales of almost $260 million, more than 90 stores and six brands, including CCX, Hips N Curves and Fox & Royal.

Navabi is City Chic’s third acquisition in less than two years and enables the retailer to enter the €40 billion European plus-sized market after expanding into the $US50 billion plus-sized market in the US in 2019 and the $US7 billion British market in 2020.

Foothold in Europe

City Chic outlaid $41 million in December 2020 for the e-commerce and wholesaling business of British plus-sized retailer Evans, which was part of Sir Philip Green’s collapsed Arcadia Group.

In October 2019 it outlaid $US16.5 million for the e-commerce business and online assets of US-based specialty retailer Avenue Stores after it went into bankruptcy.

Navabi, which was founded 12 years ago by two German technology entrepreneurs, has also been hit hard by the pandemic, which crunched demand for workwear and fashion as women were forced to spend more time at home.

Navabi’s customer numbers have fallen from 10 million pre-pandemic to 5.8 million, most of whom are in Germany, and sales of third-party and private label brands have almost halved to $16.6 million.

However, the business is still profitable and City Chic expects sales to rebound in 2022.

“When we started our American journey in 2010 what I learned was the first 5 million visitors are very hard and very costly, and you take a lot of time in a new market,” said Mr Ryan.

“This gives us that little leg-up you need when you enter a new market … it’s a great way for us to overlay our wide assortment to the customer in Europe,” he said.

City Chic plans to leverage Navabi’s customer base to introduce its stable of brands to European customers and rebuild inventories, which were depleted last year.

The acquisition will be funded from City Chic’s cash reserves of $71 million. The company raised $110 million in July last year to fund acquisitions and strengthen its balance sheet.

Morgan Stanley analysts estimated the acquisition would increase earnings per share by between 4 and 6 per cent in 2022, even with no revenue growth.


Read More:City Chic enters Europe with third plus-sized buy in two years