City Chic has released a FY20 trading update, reporting that FY20 sales revenue reached $194.5 million, an increase of 31% compared to FY19.
The update comes as the retailer prepares to acquire a second US business, Catherines.
For FY20, City Chic reported that comparable sales growth was 0.4% while EBITDA was $26.5 million.
However, the business wasn't immune from the COVID-19 disruption, experiencing a 4.8% dip in sales in Australia and New Zealand for FY20.
City Chic experienced sales growth of 9.9% in the first half which was followed by a 21.5% fall in the second half, driven by COVID-19 store closures and impacts.
To combat the COVID disruption, the business undertook more promotional activities to manage cashflow and inventories, resulting in lower gross margins.
City Chic also worked with its suppliers to reduce intake and to redeploy its stock around its global network to achieve a clean inventory position.
And, as restrictions eased, City Chic's Southern Hemisphere trading improved in June compared to April and May.
Southern Hemisphere total sales (stores and online) were 26% down in June compared to last year, compared to 47% down in April versus April 2019.
However, with Victoria in its second lockdown, City Chic has temporarily closed 20 stores, while four regional stores remain open.
Throughout the COVID period, City Chic has been receiving both the JobKeeper (Australia) and Wage Subsidy Scheme (New Zealand) payments and has so far passed on $3.7 million in payments to team members in FY20.
In March, the business also moved its team members from its Enterprise Agreement to the General Retail Industry Award (GRIA).
Given the significant underpayment scandals that have rocked the retail industry in recent years, as well as the complexity of the award and City Chic's commitment to good governance, the retailer has commissioned an external audit of its payroll systems, which is currently ongoing.
"The purpose of the external audit of payment data and processes across City Chic's businesses is to ensure that these processes are operating in accordance with City Chic's expectations and to allow any anomalies that may exist to be promptly identified and resolved," the business said in a statement.
City Chic's US websites - CIty Chic USA, Avenue and Hips and Curces, contributed sales of $65.2 million compared to $10.7 million in FY19.
This was largely driven by the expanded customer base from the Avenue acquisition, City Chic said.
City Chic ended the financial year with $21.4 million of cash and $17.5 million of debt.