Plus-size retailer City Chic has reported a double-digit lift in comparable sales in Australia and New Zealand as the brand’s market widens amid rival retreats in the plus-size space.
In its AGM this week, City Chic confirmed that ANZ comparable store sales lifted 15.4 per cent in the first 18 weeks of FY27, with full-price stores up 19.6 per cent.
Total store sales rose 7.5 per cent, even though City Chic is operating seven fewer stores than last year. The retailer now has 72 stores across Australia and New Zealand.
City Chic reported that the store growth came with higher margins and less promotional activity.
“Full-price stores are the key driver of City Chic’s profitability,” City Chic CEO and managing director Phil Ryan told shareholders.
“With much of the store cost base already fixed, stronger full-price sales and higher margins translate quickly into improved earnings.”
ANZ online comparable sales fell 7.4 per cent. City Chic attributed the fall to a planned reset of its promotional activity, which began in August. Ryan said the reset initially had a material impact on sales, but October sales were back in line with last year at stronger margins. ANZ online trading gross margin rose 200 basis points.
In the United States, comparable sales fell 12 per cent, while comparable trading gross margin dollars rose 7.1 per cent. US online trading gross margin was more than 10 percentage points above the prior corresponding period, and City Chic noted that part of the business remains profitable.
Across the group, comparable sales rose 1.2 per cent, and comparable trading gross margin dollars rose 5.1 per cent. Trading gross margin was up 240 basis points. Excluding its discontinued wholesale business, group revenue was down 1.7 per cent.
City Chic expects positive earnings before interest and tax (EBIT) for the first half, provided sales momentum continues through Black Friday and Christmas. It also remains on track to end the half with positive cash and no drawn debt.
City Chic chairman Michael Kay told shareholders that smaller online brands are struggling and closing, while larger brands such as H&M are withdrawing or reducing their plus-size inventory.
“The size inclusiveness push over the past few years seems to be waning as broader retailers come to terms with the particular and unique issues in profitably designing and manufacturing for curvy customers,” Kay said.
He added that the reduction in competition is probably helping City Chic now, and that he hopes it will continue to build.
At the same time, City Chic is extending selected parts of its range into sizes 10 and 12, using its Cut for Curves fit approach. According to Ryan, these sizes now make up 8 per cent of sales at strong gross margins and are attracting new customers.
Kay said the smaller sizes still target curvy customers with particular fit requirements.
“Additionally, having extended sizing means we can follow our customers who are on the GLP-1 journey and whose sizes are therefore prone to change,” he said. GLP-1 is a natural gut hormone that regulates blood sugar and appetite, with recent medications – colloquially known as peptides – mimicking the release of this hormone which is designed to help with diabetes and weight loss.
In the US, City Chic is repositioning itself to become what Ryan called “the dress authority for curves”. City Chic estimates the US plus-size women’s clothing market at US$54 billion (around A$83 billion), compared with US$740 million in ANZ.
“In the USA, the tariff disruption is behind us. Our focus now is rebuilding scale in a controlled and profitable way,” Ryan said.
The retailer told shareholders it is investing in proven dress styles, building an influencer and affiliate network, and spending more on customer acquisition where returns meet its expectations.
City Chic also plans to expand partners in a controlled way and to extend international shipping through Global-E.