Latest news with #CityChic
Fibre2Fashion
08-05-2025
- Business
- Fibre2Fashion
Australia's City Chic prepares for US tariff surge with strategic move
Australian multi-channel retailer City Chic Collective Limited has proactively accelerated the shipment of its Summer 2025 collection and a significant portion of its Winter 2026 range to the US, in response to the US government's recent announcement of steep global tariff increases. US contributes around 20 per cent to City Chic Collective's overall revenue, and more than 90 per cent of its product sourcing originates from China. The new measures significantly impact products manufactured outside the US, with Chinese imports facing particularly steep increases. This forward-planning move ensures that City Chic has ample pre-tariff inventory to maintain uninterrupted operations through the second quarter of FY26. This cushion provides vital time to evaluate long-term sourcing and pricing strategies amidst ongoing trade uncertainties, City Chic said in a press release. City Chic Collective has fast-tracked US shipments of its summer 2025 and winter 2026 ranges to avoid steep new tariffs, as over 90 per cent of its products are sourced from China. The company has paused further US imports, cut marketing spend, and expects lower FY26 US sales. It may exit the US market at minimal cost if tariffs remain commercially unviable. The group is actively working with its suppliers to manage the existing order pipeline and has, for the time being, paused all further stock entering the US market. Marketing spend has also been reduced to baseline requirements. Due to the tariff situation and its potential impact on consumer demand, US sales expectations have been reduced for FY26. Pleasingly, with its predominantly variable cost structure, and a further $1.5 million in fixed cost reductions, it is anticipated that this approach will help enable the business to maintain a neutral contribution margin in the short term, while also unlocking a material portion of cash tied up in working capital through the sell-down of pre-tariff inventory. The City Chic management team is monitoring all peer retailers in the US that source product from China, many of which are anticipating or already implementing price increases. While the group will continue to closely monitor market developments, in the current economic climate it does not believe that it will be feasible to raise prices sufficiently to entirely offset tariffs in the US without materially impacting demand. Given the ongoing economic uncertainty and the fluid nature of tariff negotiations, it is currently not possible to reliably estimate the impact on US revenue for the remainder of FY25. However, if these conditions persist in the medium to long term, the group has begun discussions with suppliers to explore further mitigation strategies. Owing to recent business restructuring and a flexible cost base, it retains the ability to exit the US market at minimal cost should the tariff environment prove commercially unviable, added the release. Fibre2Fashion News Desk (SG)
Fibre2Fashion
07-05-2025
- Business
- Fibre2Fashion
Australia's City Chic reports strong ANZ gains, US sales fall
Australian omni-channel retailer of apparel and footwear City Chic Collective has reported total growth of 8 per cent on prior corresponding period (PCP) in the first 18 weeks of the second half (H2) of fiscal 2025 (FY25). It reported mixed performance across regions, driven by challenging trade and consumer sentiment, particularly in the US. The result was driven by strong performance in Australia and New Zealand (ANZ), which grew 17 per cent with comparable sales up 21 per cent across all channels. In contrast, the US saw a decline of 13 per cent year-over-year (YoY). The group online traffic rose by 23 per cent, while gross margin remained in line with expectations. The ANZ business remains on track to operate 78 stores by the end of FY25, including the newly opened contemporary-format store in Wetherill Park, which has received highly positive customer feedback. The growth has been lower than planned, with the expected uplift from the recent interest rate cut and improved consumer sentiment yet to materialise to the extent the group anticipated, City Chic Collective said in a press release. City Chic Collective has reported 8 per cent growth in the first 18 weeks of H2 FY25, led by strong 17 per cent growth in ANZ, while the US market declined 13 per cent. Online traffic rose 23 per cent, and gross margin held steady. The group is targeting the lower end of its revised full-year revenue and EBITDA range due to ongoing US volatility, while continuing to focus on sales and margins. At the H1 FY25 results announcement, the group revised its full-year guidance to revenue between $137 million and $147 million, with EBITDA projected between $8 million and $12 million. Given ongoing volatility in the US market and trading conditions in the first 18 weeks of 2H FY25, City Chic is now aiming for the lower end of these ranges. However, continued uncertainty may cause actual results to fall short. Management remains focused on executing its strategy, driving sales, safeguarding margins, and implementing the cost reduction programme to strengthen the business for long-term growth, added the release. Fibre2Fashion News Desk (SG)
West Australian
07-05-2025
- Business
- West Australian
Temple & Webster says US-China trade war ‘net positive' for online furniture retailer
Temple & Webster says the trade standoff between the Trump administration and China has been a 'net positive' for the online furniture retailer as it posts a jump in revenue. Temple & Webster shares were 88¢ higher at $18.11 just before 11am on Wednesday after the company said it also expected its full-year earnings margin to be at the top end of guidance of between one per cent and 3 per cent. In a trading update, the retailer said growth accelerated over the half, with revenue up 18 per cent between January 1 and May 5 compared with the same time last year. Since March 1, revenue has grown 23 per cent. Its growing home improvement category — which includes bathroom and kitchen fixtures, wallpaper and ceiling fans — continued to outperform, with half-to-date revenue up 42 per cent. Temple & Webster chief executive Mark Coulter said its ability to grow market share was achieved amid persistent cost-of-living pressures, cyclone Alfred on the east coast, a Federal election and broader global uncertainty. 'Our focus this half has been to ensure we have the right products, price points and promotions to drive engagement and conversion, a strategy which is clearly resonating with our customers,' he said. He added the US-China tariff war so far had been a net positive for the business, most directly felt through lower inbound shipping rates of about 20 per cent. The Sydney-based company sells more than 200,000 products — ranging from furniture, homewares and home renovation — and operates a drop-ship model where suppliers ship directly to customers. Its suppliers are located in China, as well as Malaysia, Vietnam and the Philippines. 'If these deflationary effects continue, combined with some of the macro tailwinds we are seeing (such as reducing interest rates and stimulatory Australian Government policies around housing), we should see market conditions improve further,' Mr Coulter said. US and Chinese officials are set to start talks this week to try to deescalate the trade war between the world's two biggest economies. Beijing slapped the US with a 125 per cent tariff after President Donald Trump imposed new import taxes on Chinese goods of up to 145 per cent. Earlier this week, plus-size women's fashion retailer City Chic said it had the option to pull the plug on its US operations if talks between the US and China failed to resolve the trade war.
West Australian
05-05-2025
- Business
- West Australian
City Chic flags US exit option amid tariff upheaval
City Chic says it has the option to pull the plug on its US stores if talks between the Trump administration and Beijing fail to resolve a standoff that has slapped a 145 per tariff on Chinese imports. The plus-size women's fashion retailer told investors on Monday that sales in the second half of the financial year would come in at the lower end of guidance, even after it raced to bring new season stock into the US before it was hit by Donald Trump's massive impost. The group generates 20 per cent of revenue from the US and 90 per cent of its products are made in China. City Chic said it had moved to soften the blow by bringing the bulk of its summer 2025 range and a substantial portion of its winter 2026 apparel into the US ahead of the changes, which it said should keep its store stocked until the second quarter of the new financial year. But all further imports from China have now been paused while it works with suppliers on existing orders. It has also slashed its US marketing spend. Leaders in Beijing are still mulling the possibility of trade talks between the world's two biggest economies after the US broke the stalemate with an approach to do a deal late last week. 'Given the economic uncertainty and fluidity of potential tariff negotiations, it is not yet possible to provide a reliable estimate of the impact on the revenue of the USA business for the remainder of FY25,' City Chic said. 'Should these conditions continue over the medium to long term, the group has commenced discussions with its suppliers to further mitigate the impact of the increased tariffs. 'Due to restructuring of the business and the variable nature of the cost base, the group has the option to exit the USA with minimal cost if the tariff situation remains uncommercial.' City Chic said US sales in the first 18 weeks of the second half were down 13 per cent compared to a year earlier, noting 'trade and consumer sentiment was already volatile' before Mr Trump imposed savage tax increases on his country's trading partners on April 2. Troubles in the US were in stark contrast to the performance of its store in Australia and New Zealand, which increased sales during the period by 17 per cent. But the company conceded sales growth had been lower than expected, despite strong customer numbers, growing online demand and improving consumer sentiment after the Reserve Bank's February interest rate cut and expectations of more to come this year. City Chic said efforts to reduce group costs by $2 million were on track and there was a further $1.5m to be trimmed from US operations. But it said already downgraded revenue guidance for the second half of between $137m and $147m would now come in at the lower end of the range. 'While management will use the low end of this range as its target for the remainder of the financial year, the current volatility and uncertainty puts this result at risk and results could fall short of this target,' it said. 'The management team remains firmly focused on executing its strategy, driving sales, protecting margins, and delivering the planned cost reduction program to position the business for long-term success.'
