City Chic has just warned of an expected sales drop by 30% this year and a mega-loss amounting to over $91 million.
👉 Background: City Chic first opened its stores in Sydney back in 1992 and listed on the ASX just six years later. More recently, City Chic has made multiple acquisitions in the plus-sized fashion space, which is what it’s known for now.
👉 What happened: City Chic copped a serious beating through the pandemic, and came out of it having lost 95% of its value. And it ain't getting much better. It has just warned of an expected sales drop by 30% this year and a mega-loss amounting to over $91 million.
👉 What else: To make matters worse, City Chic is looking for $27.5 emergency cash from investors to help it stay afloat due to excess inventory.
💡The art of retail is having enough stock so you're not sold out, but not too much that you're forced to discount stock.
💡This tightrope has been an ongoing issue for City Chic since 2022. They were holding onto more than three times the stock it needed and had to offer discounts of up to 80% on some of its items to get rid of them.
💡City Chic’s not the only retailer that’s fallen prey to the old ‘too much stock’ problem. Nike was holding on almost $10 million worth of inventory late last year, which pushed its share price down almost 20%.
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