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City Chic to shutter 14 stores on rent negotiations

City Chic Fountain Gate store
City Chic Fountain Gate store

Fashion retailer City Chic will shutter 14 stores after failing to negotiate reduced rents with landlords as it seeks to refocus its capital expenses following the impact of COVID-19.

The remaining 92 stores will remain open with reduced rents moving forward, as well as agreed-upon rent reductions for the time spent in hibernation. 

“The decision to close these stores reflects our focus on appropriate store economics,” said City Chic chief executive Phil Ryan. 

“We remain committed to opening new stores and converting stores to large formats where deals can be structured to reflect the current retail environment.”

A City Chic spokesperson confirmed to Inside Retail the Miranda, Tuggerah, Kotara, Liverpool, Sydney, Knox, Southland, Doncaster, Woden, Belconnen, Northlakes, Westlakes and Tea Tree Plaza stores in Australia would be closed, as well as the Rickerton store in New Zealand.

Ryan said the majority of staff were redeployed to nearby stores, though an undisclosed number of staff are now out of work.

These staff join the 823,000 Australians currently unemployed according to the Australian Bureau of Statistics, as the unemployment rate reached 6.4 per cent at the end of April 2020 – compared to 5.2 per cent in January.

The store closures also partly reflect the shifting tide of online shopping, Ryan said, with City Chic focusing on connecting with customers across multiple touchpoints and executing on its digital strategy. 

During the lockdown period City Chic’s online sales grew by 57 per cent due to the business quickly adjusting its product range toward intimates, streetwear and casual wear. 

Sales in these sections of the business grew while sales in its higher-end ranges fell, though increased promotional activity pulled online gross margin down despite an overall increase in activity.

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