Retail: City Chic has turned a $9m loss into a $16m profit

Shares in City Chic Collective (ASX:CCX) could hit 12-year highs after a bumper FY19 that saw it skyrocket into the black.

City Chic Collective, formerly known as Specialty Fashion, posted a $9 million loss in the 2018 financial year, but the divestment of five of its brands in early July last year has resulted in a $25 million turnaround.

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Two days into the 2019 financial year City Chic sold its Millers, Katies, Crossroads, Autograph and Rivers businesses to Noni B (ASX:NBL), which also reported today, for $31 million, leaving it only the City Chic brand.

Those businesses were hammering City Chic’s bottom line, to the tune of $24 million, which led to last financial year’s $9m loss. They contributed $621 million in revenue but expenses outweighed that figure by nearly $23 million.

This financial year, City Chic’s total profit rose to $16 million and revenue increased by 80 per cent to $149 million. As a result, shares rose 11 per cent to $2.00, their equal-highest point since early 2007.

“FY19 was an important year for City Chic, our first as a standalone business,” Phil Ryan, CEO, told investors.

“It has been a transformative year and I would like to thank our team for their hard work and commitment in successfully executing the transition to a standalone business. The business is now well positioned to pursue our growth agenda and has the capital necessary to execute our strategic priorities.”

Noni B, meanwhile, saw revenue increase by 137 per cent to $882 million, though profit more than halved to $8.1 million. Shares in the company fluctuated between lows of $2.53 and highs of $2.65.

In other ASX retail news today…

Sealink Travel (ASX:SLK) reported increased revenue and profit. Revenue rose 20 per cent to $249 million and profit crept up 6 per cent to $23.4 million, but shares dropped as much as five per cent to $3.44. RBC Capital Markets analyst Tim Piper said that was due to FY20 forecasts being below expectations.

Wide Open Road (ASX:WOA) is selling plenty of its “regenerative beef”. Sales of its regenerative, 100 per cent grass-fed, beef and lamb increased to $55,000 for the month of July, up from $42,000 in June. The company’s focus is on producing meat as sustainably as possible.

And Kogan.com’s (ASX:KGN) co-founders have pocketed nearly $30m in share sale. As flagged by the company late last week, co-founders Ruslan Kogan and David Shafer have trousered $29.9 million in cold hard cash by selling 3.8m and 1.4m of their shares respectively, at $5.75 a pop.