The City Chic Collective Ltd (ASX: CCX) share price has taken off in early trade this morning on the back of a COVID-19 update. The ASX retail share announced strong online sales growth, profitability through the pandemic, and the staged re-opening of stores across Australia and New Zealand.
City Chic is a global, omnichannel retailer that specialises in plus-size women’s apparel, footwear and accessories. It is a collective of customer-led brands, including City Chic, Hips & Curves, and Avenue, the latter of which was acquired towards the end of last year.
The company’s omnichannel model comprises a network of more than 100 stores across Australia and New Zealand, multiple websites operating in Australasia and the US, and wholesale partnerships with major retailers, including Nordstrom, ASOS, and Macy’s.
What did City Chic announce?
One of the key takeaways from this morning’s announcement is that City Chic has managed to trade profitably through the period of COVID-19-related restrictions.
On 27 March, City Chic made the move to temporarily close its brick-and-mortar stores. However, being an omnichannel retailer with online contributing two-thirds of its global sales, most of City Chic’s business has continued to operate.
Notably, the company revealed 57% online sales growth during the store closures compared to the same period last year.
City Chic has been adjusting its product mix to suit a change in customer behaviour, with strong buying of intimates, casual and streetwear offsetting weaker demand for ‘better-end dressing’. However, the retailer flagged it has been “more promotional” in order to manage cash flows and inventories, which has led to lower online gross margins.
How has City Chic responded to COVID-19?
Over the past 8 weeks, City Chic has implemented a number of measures to minimise the impact of the closure of its store network. With this, the retailer has driven working capital efficiencies, reduced head office costs, and deferred non-essential capital expenditure.
Additionally, City Chic has negotiated reduced rents with a large majority of landlords, along with “market appropriate go-forward rents” while uncertainty relating to COVID-19 remains.
The retailer notes it is in a strong financial position with minimal debt and significant headroom in its $40 million debt facility.
Over the past 2 weeks, City Chic has trialled a number of stores to ensure it is able to open its store network with the appropriate safety and hygiene measures in place.
After closing on Friday at a price of $2.44, City Chic shares jumped as much as 13.52% this morning to an intra-day high (so far) of $2.77. Pulling back somewhat to sit at $2.65 at the time of writing, the City Chic share price is back in positive territory for the year with a 4.74% gain year-to-date.
NEW! 5 Cheap Stocks With Massive Upside Potential
Our experts at The Motley Fool have just released a FREE report detailing 5 shares you can buy now to take advantage of the much cheaper share prices on offer.
One is a diversified conglomerate trading 40% off it’s all-time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
YES! SEND ME THE FREE REPORT!
More reading
Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post ASX retail share jumps 13% after announcing bumper online sales growth appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/2AQ3voL
May.24 — Susan Shirk, a former deputy assistant secretary of state during the Clinton administration and currently a professor chair of the 21st Century China Center at the School of Global Policy and Strategy at the University of California, San Diego, looks at the tensions between the U.S. and China. The U.S. should give up its “wishful thinking” of changing China, Foreign Minister Wang Yi said, warning that some in America were pushing relations to a “new Cold War.” Shirk speaks on “Bloomberg Markets: Asia.”
