City Chic pays dividends

Fashion retailer ups profit amid sector downturn

INVESTORS in newly single retailer City Chic will enjoy a special dividend after the women’s fashion specialist shrugged off an apparent retail downturn and lifted its firsthalf profit by 35 per cent to $9.85 million.

In its first set of results since offloading loss-making brands Millers, Autograph, Katies, Crossroads and Rivers to rival Noni B for $31 million, the company formerly known as Specialty Fashion Group announced it would pay a fully franked dividend of 5 cents a share, including a 2.5 cent spe- cial payout. City Chic’s total revenue for the six months to December 30 rose 7.1 per cent to $75.4 million, including a strong Christmas trading period, according to chief executive officer Phil Ryan.

Shares in City Chic ( pictured) were trading more than 30 per cent higher at a near nine-year record of $1.38 at midday yesterday.

Mr Ryan said proceeds from the brand divestments back in July lifted the group’s net cash position at December 30 to $35.5 million, compared to $16.1 million at the end of the 2018 fiscal year, backing up dividend recommendations.

He said City Chic would build on its new independence by expanding its online platform, rolling out larger format stores and building its range.

“We have successfully transitioned to stand-alone IT infrastructure following the ($31 million) divestment and are now fully independent,” Mr Ryan said.

City Chic has 104 stores in Australia and New Zealand, opening five new outlets during the period and closing eight Myer concessions.

Mr Ryan said City Chic had delivered positive comparable sales growth, in the early part of the second half, in line with expectations. Australia’s overall retail trade performance fell at Christmas after a November boosted by Black Friday sales, while tough trading conditions have resulted in a string of retailers closing in recent times, including Marcs, Pumpkin Patch, Payless Shoes and Roger David.

Ed Harry has also entered administration, while department store Myer is struggling and The Reject Shop is fighting off a takeover attempt.

Noni B, however, has continued its turnaround from near-collapse in 2014.