ASX retailer to buy ecommerce assets of 90-year-old UK fashion chain; shares up 40pc in 2020
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ASX plus size fashion retailer City Chic Collective (ASX:CCX) is buying the ecommerce assets of British women’s fashion chain Evans.
Evans began way back in 1930 but its most recent owner Arcadia entered administration last month.
City Chic Collective is snapping up Evans’ ecommerce assets, but not its brick and mortar store network.
City Chic will pay $41 million, which will be funded from existing cash reserves.
City Chic anticipates the acquisition being earnings accretive within the first full year as part of the group. Evans generated £60 million ($106 million) in sales prior to COVID-19.
Evans is also a big ecommerce player. In the 12 months to August 2020 its website had 19 million visits and generated approximately £23 million ($41 million) in sales.
“Evans gives us an excellent foundation in a new geography to grow our collective and is a brand which aligns with our existing product streams,” said CEO Phil Ryan.
“The acquisition meets our strategic objective of growing through global customer acquisition, digitally and in the $50 billion curvy apparel market.”
While administrators will be able to trade Evans’ UK stores until the end of the March quarter, City Chic says any ecommerce sales leaking will be minimal as Evans’ store network had been progressively shrinking as customers transitioned online.
City Chic shares gained 13 per cent today and are up nearly 40 per cent in the last 12 months.
While its performance is below pure-play ecommerce stocks, it is above several other ASX retailers which still possess a significant brick and mortar store network such as Myer (ASX:MYR) and Kathmandu (ASX:KMD).