Plus-size clothing retailer City Chic said it doesn’t know how the ongoing spread of COVID-19 will impact its sales and earnings for the remainder of the financial year.
The ASX-listed omnichannel brand has released a trading update after its shares suffered heavy losses on Wednesday, closing 15.79 per cent lower.
Its share price was still trading lower as of Thursday morning, but the company said comparable sales growth has been strong so far this year at 8.6 per cent.
City Chic stated however that the escalation of government containment measures globally because of the coronavirus crisis is affecting consumer spending and its impact on sales and earnings for the remainder of FY20 is uncertain.
Phil Ryan, City Chic chief executive officer and managing director, reassured investors that the company is an agile organisation and contingency plans are in place to ensure they can effectively operate their business.
“Since Avenue joined the collective approximately two-thirds of global sales have been through the online channel, which attracts relatively low capital requirements, has low fixed costs and provides flexibility in the cost base,” Ryan said.
“This means we can deal with a protracted reduction in economic activity and disruption to our operations.”
The Australian multichannel retailer said that over the past month, it has successfully worked with its Chinese supply partners and has re-established a stable supply chain after the recent disruption caused by the impact of the coronavirus in China.
The company also added that since the release of its first-half results, it has been able to strengthen its financial position by successfully refinancing its existing $17.5 million debt facility to a larger one totalling $35 million, which extends for a three-year period.