Promos to drive demand

PLUS-SIZED women’s fashion chain City Chic has been forced to slash prices to encourage consumers amid heightened retail competition.

City Chic, which has stores across Australia, Europe and North America, said on Friday the competition was particularly intense in the US, where promotional activity typically reserved for Black Friday sales was happening earlier than usual, depressing margins.

Competition and sales were similarly rough in parts of Europe, while Australia was flat.

In a trading update, chief executive Phil Ryan (pictured) said globally, the retailer’s revenue was down 2 per cent for the financial year to date.

“Demand has been volatile, and the consumer is looking for promotion as a reason to buy,” he said.

“We have adapted to this environment and responded to the customers’ behaviours and have promoted to stimulate demand, not to clear inventory.

“The competitive landscape, especially in the northern hemisphere, has intensified as all businesses promote aggressively to capture the limited dollars.”

He said for the first 20 weeks of the 2023 financial year, its Australian and New Zealand operations were up 10 per cent, driven by stores being up 56 per cent, and online down 11 per cent off a very strong prior corresponding period in 2022.

Mr Ryan said the introduction of its fashion brands Avenue and Evans products to the Australian market had provided the building block that had bridged the gap to last year, as online shoppers return to stores Australia wide.

In the US, sales are down 12 per cent year on year, however up 44 per cent on the same period in 2021. In Europe, sales were down 5 per cent.