City Chic has expanded its international presence even further, announcing its successful acquisition of Arcadia Group brand Evans for $41 million AUD.
Following the collapse of parent company Arcadia Group on 30 November, the plus-sized retailer was placed up for sale, with City Chic acquiring the brand (IP, customer base and inventory) eCommerce and wholesale businesses on 23 December.
The deal excludes the Evans franchise business which is operated primarily in the Middle East as well as its 100 bricks-and-mortar stores across the UK, as administrators continue to trade in the stores to liquidate existing stock until the end of March 2021.
Speaking on the acquisition, City Chic CEO Phil Ryan said that the business is excited to expand on its existing relationship with the Evans brand.
"I have followed Evans for over a decade and seen how within Arcadia's portfolio the brand has evolved from a dominant high street retailer into a more digitally focused business.
"We has a successful partnership with Evans for many years which was a great channel for the City Chic brand in the UK.
"Evans gives us an excellent foundation in a new gepgraphy to grow out collective and is a brand which aligns with our existing product streams," he said.
Established in 1930, Evans is a well-recognised plus-sized retailer of apparel and footwear in the UK.
In the financial year to August 2020 (12 months) the Evans website clocked up 19 million visits and generated approximately £23 million in sales, while the wholesale business delivered £3 million.
The business' digital channel is one of the strongest for sales, with approximately half of its direct-to-consumer sales being transacted in the digital channel.
The overall Evans group - including online, wholesale, stores and the franchise operations - delivered £60 million in annual sales before the COVID-19 pandemic.
When it comes to the bricks-and-mortar stores, City Chic suggests that the Evans store portfolio has been reducing in size for a number of years, with many customers shifting to the digital channel.
City Chic anticipates that this will minimise any eCommerce sales leakage as a result of the administration-led store liquidation.
"The acquisition meets our strategic objective of growing through global customer acquisition, digitally and in the $50 billion curvy apparel market," Ryan added.
"In addition to providing a launching pad into a new market, we are confident we can deploy our lean, customer-centric operating model to drive revenue growth and cost efficiencies in the existing business.
"We have a great opportunity ahead of us to develop the third major region for the City Chic Collective," he said.
City Chic expects that the acquisition will be earnings accretive in the first full year within the City Chic Collective.
The acquisition was funded by City Chic's existing cash balance, which pre-acquisition at 30 November 2020 was $121 million AUD.
The business' $40 million AUD debt facility remains undrawn.