Plus-size fashion retailer City Chic has reported a 10 per cent lift in sales across the Australian and New Zealand market in the first 18 weeks of FY26.
Total revenue during the period was up 2.6 per cent, which was offset by a 21.1 per cent slip in sales across City Chic’s United States market. City Chic added that this double-digit percentage fall in the US is ahead of expectations.
“The momentum in our ANZ business has continued to strengthen over the past 10 weeks, validating our strategic focus on our high value customers and the comprehensive improvements we’ve made to our product quality and customer appeal,” CEO and managing director Phil Ryan said. “Margins are where they need to be, and costs are firmly under control.”
Ryan said the result was achieved while reducing inventory and improving its working capital position. He added that City Chic now has the right inventory level to drive revenue and positive operating cash flows, with new inventory ready in-market for the critical black Friday and Christmas trading periods in ANZ.
"Our USA business has remained profitable and has exceeded sales expectations despite the strategic reduction in purchasing we implemented in response to tariff-induced volatility,” Ryan continued. “The resilience of the US consumer has been a pleasant surprise, and we’re encouraged by the underlying strength of our direct-to-consumer channels.”
Website and marketplace sales for City Chic in the USA is down 9.8 per cent, which is also better than expected. The wholesale channel over there, which is reliant on new product launches, has been more significantly impacted, also cycling a particularly strong July and August.
“The next eight weeks are crucial to the half-year result, and with improved product in market and the sell though achieved to date, we have positioned ourselves well to deliver on our plan.”
According to City Chic, a key part of the booming sales lift in AU/NZ follows a product development overhaul over the past 12 months, with management implementing greater rigour across design and quality control. “While this initially resulted in a slower-than-planned intake of AU/NZ Summer product, it represents a deliberate shift away from the highly competitive lower-price segment toward higher quality and margin product,” City Chic reported.
Increased volumes of new products have arrived over the past two weeks, and early performance has been “encouraging”, with inventory sell-through meeting or exceeding all key performance indicators.
Over the last 18 weeks, City Chic also opened two new stores under the refreshed store concept, at Mount Gravatt, Queensland and Highpoint, Victoria, with both said to be trading well.
In the USA, the summer product that was brought in early has performed ahead of expectations, with City Chic reporting stronger sell-through as the season was extended to maximise sales opportunities.
“Due to the tariff-led volatility the group reduced intake of winter product and lowered sales expectations,” City Chic added.
While inventory levels are down in the USA, City Chic noted that planning is well advanced for next summer, where the group is taking a “cautiously optimistic” view of trading conditions and buying inventory to support planned second-half FY26 sales levels.
“Management continues to monitor the US trading environment and is encouraged by its increasing stability and the recent positive outlook for trade agreements.”
As noted, the group’s gross margin performance is in line with expectations, with the plus-size retailer pointing to good results in its AU/NZ full-price stores and website. “This reflects the continued improvement in product quality and design, as well as the strategic shift away from a more promotional trading model towards a stronger, full-price sales mix.”
City Chic also reported that its total cash balance is $9.5 million and the debt facility, which is in place until December 2026, is expected to be repaid during this half. This will meet all clean-down covenants for FY26 and should leave the company with no drawn debt on the $10 million facility at the end of this half.