Fashion retailer City Chic completes $14m turnaround with FY25 results back in the black

At a time when multiple fashion retail brands have fallen on hard times, from Wittner to Jeanswest to all of Mosaic Brands' portfolio, plus-size women's clothing seller City Chic Collective (ASX: CCX) has managed to successfully turn the tide in its FY25 results.

In a trading update released today that showed a slight rise in global sales revenue to $134.7 million, City Chic has reported an unaudited underlying EBITDA range of $6-6.5 million for FY25, compared to an $8.4 million loss in the previous year.

While sales grew by just 2.3 per cent overall, on a same-store basis they rose by 8.4 per cent while the retailer lifted trading margins by a few percentage points at the same time. 

"I am pleased with the EBITDA turnaround – returning to profitability is a significant milestone for the business," says City Chic chief executive officer and managing director Phil Ryan.

"We’re making strong inroads in our margin improvements and cost base reductions and are now focused on driving revenue growth, that will deliver sustainable profitability."

Ryan highlights a 15.2 per cent lift in revenue in the June half across Australia and New Zealand, with strong customer numbers both online and in stores.

"The growth has been lower than planned, with the expected uplift from the recent interest rate cuts and improving consumer sentiment yet to materialise to the extent anticipated," he says.

"The USA has remained volatile, with the ongoing changes in USA foreign trade policy directly impacting demand. Both factors have resulted in our revenue and EBITDA being slightly below our guidance.

"Making these inroads has not been easy, and I believe we are only halfway there on this journey. But with our simplified structure and significantly lower cost base, we are well positioned to take advantage of more favourable market conditions when these return."

Ryan asserts the recovery has been led by better product, including better quality, ranges and customer proposition.

"We have listened closely to what she’s been telling us, implemented the changes, and have been pleased by her response to our new collections. We acknowledge there's more to achieve, but our momentum is strong and headed in the right direction," he says.

"“Our customer numbers have held firm, she’s stayed with us, and we’re committed to deepening that relationship. The pathway to future growth is in listening to her, delivering exactly what she wants, and building the kind of loyalty that drives increased annual customer spend.

"The early results from our new Wetherill Park store have been encouraging, with positive customer feedback on the new concept – a great sign for our future store strategy. In the USA, our business remains profitable, and we’ve worked closely with our suppliers to share the impact of the tariffs and accordingly have cautiously recommenced limited purchasing in the USA to replenish best sellers and deliver newness."