Plus-sized fashion retailer City Chic has successfully completed an $80 million placement in an effort to acquire part of it’s third US-based brand – Catherines.
City Chic was picked as the stalking-horse bidder of the collapsed business’ e-commerce assets, which entered bankruptcy last Thursday, 23 July.
Phil Ryan, chief executive of City Chic, said the business was very pleased with how quickly shareholders took up the offer of the additional 26.2 million shares, at a price of $3.05 per share.
“[It] is a strong endorsement of City Chic’s customer-centric business model and growing global market presence,” Ryan said.
“The potential acquisition of Catherines meets our strategic objectives for scaling our business across geographies and plus-size segments.
“The acquisition of the e-commerce assets of… Avenue in October 2019 provides us with a blueprint for expansion and an understanding of the benefits of deploying our lean, customer-centric operating model to drive revenue growth and cost efficiencies.”
City Chic’s initial bid for Catherines only sits at US$16 million, though with the collapsed brand being sold via auction the additional money raised can be used to up the offer.
Otherwise, the left over cash injection will go to strengthening the businesses balance sheet and pursing “other opportunities that may arise given the current economic environment”.
City Chic pointed out it is exploring further opportunities to grow its customer base across the world.
On Friday, City Chic also announced that while unaudited revenue had grown 31 per cent in FY20, sales in Australia and New Zealand fell 4.8 per cent after a 21.5 per cent drop in sales during the second half.
This fall was largely due to the lockdown measures enforced across ANZ.