City Chic turns a corner with $15m profit turnaround in FY25

City Chic store — The hit from the US led to an overall revenue decrease of 0.5 per cent (Source: City Chic)

By Irene Dong August 28, 2025

Text Size

City Chic has reported a return to profitability in FY25, delivering a $15 million turnaround driven by significant cost reductions, improved trading margins, and targeted inventory and product strategies.

For the 12 months ended June 29, the company posted $6.4 million in underlying EBITDA, reversing an $8.4 million loss in FY24. Global revenue rose 2.3 per cent to $134.7 million, supported by double-digit growth in its core Australia and New Zealand (ANZ) markets.

“We’ve driven meaningful margin improvement and tightened our cost base, setting the stage for renewed top-line momentum and sustainable profitability,” said Phil Ryan, CEO and MD of City Chic.

Revenue in ANZ climbed 8.3 per cent to $105.8 million, with both online and physical store channels contributing to growth. Comparable store sales rose 8.4 per cent year-over-year, accelerating to 10.3 per cent in the second half. Online revenue grew 10.9 per cent.

In contrast, US revenue declined 14.9 per cent to $28.9 million, impacted by the exit of the Avenue brand. However, sales of City Chic-branded products in the US rose 25.6 per cent, reflecting the company’s shift toward its higher-margin core offering. The US business returned to profitability in the second half.

“Our new store concept, which was rolled out in Wetherill Park this year, has delivered encouraging early results, with stronger trading gross margins, and an increase in average selling prices, with overwhelmingly positive customer feedback,” added Ryan.

The average basket price increased 14 per cent year-over-year, driven by a refreshed product mix and greater engagement from high-value customers, who now account for over half of the active customer base.

In the first eight weeks of FY26, ANZ revenue was up 8.7 per cent year-over-year, while the US remained profitable despite lower overall revenue. The company expects continued margin improvement and gains from an optimised product mix to drive performance in the year ahead.

City Chic plans to expand its retail footprint, with six to eight new stores under its updated concept set to open in FY26, and a long-term target of 120 stores.

It will also strengthen retail partnerships, including those with Myer and US-based Belk, and launch a new Store-To-Door initiative to enhance conversion and customer experience.