City Chic Collective Limited · ASX:CCX
City Chic Collective — Investor Presentation (July 2020)
32 slides from City Chic Collective's investor presentation, Jul 24, 2020
Slide 1: Leading a World of Curves: Capital Raising and Business Update
LEADING A WORLD OF CURVES Capital Raising and Business Update 1 24 July 2020 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER The following disclaimer applies to this investor presentation prepared by City Chic Collective Limited ACN 057 569 169 (City Chic) which is dated 24 July 2020 (Presentation). This Presentation has been prepared in relation to: • a placement of new fully paid ordinary
Slide 3: Important Notice and Disclaimer (Cont'd)
IMPORTANT NOTICE AND DISCLAIMER (CONT’D) This Presentation has been prepared without taking into account your investment objectives, financial situation or particular needs. Before making an investment decision, you should consider whether it is a suitable investment for you in light of your own inv
Slide 4: Important Notice and Disclaimer (Cont'd)
IMPORTANT NOTICE AND DISCLAIMER (CONT’D) A number of important factors could cause City Chic’s actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. Refer to the "Key Business Risks" section of this Presen
Slide 5: Contents
CONTENTS 1 Executive Summary 2 Acquisition and Strategy Execution 3 Trading Update 4 Equity Raising Phil Ryan, CEO Munraj Dhaliwal, CFO 5 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 6: Executive Summary
6 1 EXECUTIVE SUMMARY NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 7: Executive Summary
EXECUTIVE SUMMARY • City Chic’s trading has continued to improve since its trading update on 25 May 2020, with sales in Australia and New Zealand further strengthening as the majority of the store network re-opened and sales through the Avenue website continued to be resilient Trading Update • City
Slide 8: Acquisition and Strategy Execution
8 2 A C Q U I S I T I O N A N D S T R AT E G Y E X E C U T I O N NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 9: Market Update and Opportunity for City Chic
MARKET UPDATE AND OPPORTUNITY FOR CITY CHIC GLOBAL PLUS-SIZE MARKET OVERVIEW CITY CHIC POSITION CURRENT MARKET CONDITIONS Leadership position with Australia and New Zealand women’s plus-size significant share in apparel market of approximately ~A$1bn1 Fashion/Youth. Opportunity • Current economic un
Slide 10: Our Vision is to Lead a World of Curves
OUR VISION IS TO LEAD A WORLD OF CURVES Strategic priorities: scaling globally Take advantage of Leverage product Customer acquisition Segment expansion current market across expanded online and driving brand within plus-size, extend conditions to accelerate customer base awareness product offering
Slide 11: Potential Acquisition of Catherines
POTENTIAL ACQUISITION OF CATHERINES • On 23 July 2020, City Chic was selected as the Stalking Horse Bidder and signed an asset purchase agreement for the eCommerce Acquisition assets of Catherines (a part of US-listed Ascena Retail Group Inc NASDAQ:ASNA) which are to be sold via auction as part of a
Slide 12: Catherines overview
• Catherines is a women’s apparel, intimates, footwear and accessories retail brand targeting the value-conscious, mature plus-size customer • Founded in 1960 in Memphis, Tennessee, with higher customer penetration in the South and Mid-West of the United States • c.300 stores across 44 states in the
Slide 13: Avenue Provides a Blueprint for Successful Execution
AVENUE PROVIDES A BLUEPRINT FOR SUCCESSFUL EXECUTION The potential acquisition of Catherines Similar execution and integration to that required on shares similarities to Avenue the Avenue acquisition Large loyal customer base across the US; Restructure into leaner operating model – done strong emoti
Slide 14: A Global Collective of Plus-Size Brands
A GLOBAL COLLECTIVE OF PLUS-SIZE BRANDS Playwear & Intimates Segment Fashion Forward Youth Casual Conservative Conservative Lifestyle Age 18-35 18-25 18-39 35-55 40-60 Price Point Mid/High Mid/High Mid-market Mid-market Mid-market Stores Online Stores Channel Online Online Online Marketplace Online
Slide 15: Trading Update
15 3 T R A D I N G U P D AT E NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 16: FY20 Trading Update
FY20 TRADING UPDATE Financial highlights Operational highlights FY20 sales revenue (unaudited) of $194.5m, Acquisition and Expanded online offering, representing 31.0% YoY total sales growth and integration of Avenue including launch of Fox 0.4% comparable sales growth1 & Royal Unaudited Underlying
Slide 17: Sales Performance by Channel & Region
SALES PERFORMANCE BY CHANNEL & REGION REVENUE BY CHANNEL CHANNEL: CONTRIBUTION • Online represents 65% of total sales¹ FY20 FY19 - Active customer base and online sales growth $m FY18 FY19 FY20 globally 4% 6% - Avenue contribution represents 37 weeks post 4% 6% Stores 78.1 74.6 60.2 acquisition 31%
Slide 18: Equity Raising
4 EQUITY RAISING 18 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 19: Details of the Offer
DETAILS OF THE OFFER • Fully underwritten $80.0m institutional Placement and a non-underwritten SPP to raise up to approximately $10.0m Offer Size and Structure • It is intended that eligible institutional shareholders who bid for up to their ‘pro-rata’ share of New Shares under the Placement will b
Slide 20: Use of Proceeds
USE OF PROCEEDS • Proceeds from the offer will be used as follows: ‒ to fund the potential acquisition of Catherines’ eCommerce assets from the Ascena Retail Group ‒ to further strengthen the balance sheet and provide financial flexibility to accelerate growth globally ‒ for general corporate purpos
Slide 21: Offer Timetable
OFFER TIMETABLE Event Date1 SPP record date 7:00pm (Sydney time), Thursday, 23 July 2020 Trading halt and announcement of the Placement and SPP Friday, 24 July 2020 Placement bookbuild Friday, 24 July 2020 Announcement of the outcome of the Placement Monday, 27 July 2020 Trading halt lifted – tradin
Slide 22: Appendix
22 5 APPENDIX NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 23: Key Business Risks
KEY BUSINESS RISKS RISK FACTORS There are a number of factors, both specific to City Chic and of a general nature, which may affect the future operating and financial performance of City Chic, its products, the industry in which it operates and the outcome of an investment in City Chic. There can be
Slide 24: Key Business Risks (Cont'd)
KEY BUSINESS RISKS (CONT’D) Sales and City Chic's revenue depends on the extent and timing of future product sales. There is a risk that expected revenue levels may not be realised at all, including as a result of COVID-19. revenue risk There is a risk that the impacts of COVID-19 could extend indef
Slide 25: Key Business Risks (Cont'd)
KEY BUSINESS RISKS (CONT’D) Competition risk City Chic operates in a competitive market. The loss of customers (notwithstanding COVID-19) may negatively impact earnings. Additionally, the risk from increased competition may negatively impact on sales and profitability. The actions of an existing com
Slide 26: Key Business Risks (Cont'd)
KEY BUSINESS RISKS (CONT’D) Regulatory and City Chic and its operations are subject to a range of regulatory requirements both in Australia and overseas. City Chic is exposed to the risk of changes in regulatory requirements, compliance risk changes in the interpretation and enforcement of regulator
Slide 27: Key Business Risks (Cont'd)
KEY BUSINESS RISKS (CONT’D) Dilution risk If shareholders do not participate in the SPP then their percentage shareholding in City Chic will be diluted as a result of the Placement and the SPP. Even if a shareholder does take up their full allocation under the SPP, their percentage shareholding in C
Slide 28: Key Business Risks (Cont'd)
KEY BUSINESS RISKS (CONT’D) Dependence on The operating and financial performance of City Chic is influenced by a variety of general economic and business conditions, including levels of consumer spending, inflation, interest general rates and exchange rates, access to debt and capital markets and g
Slide 29: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of City Chic in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not
Slide 30: Foreign Selling Restrictions (Cont'd)
FOREIGN SELLING RESTRICTIONS (CONT’D) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials
Slide 31: Summary of Termination Events Under the Placement Agreement
SUMMARY OF TERMINATION EVENTS UNDER THE PLACEMENT AGREEMENT City Chic has entered into a Placement Agreement with the Underwriters in respect of the Placement, pursuant to which the Underwriters were appointed and agreed to act as joint bookrunners, lead managers and underwriters to the Placement. T
Slide 32: Summary of Termination Events Under the Placement Agreement
SUMMARY OF TERMINATION EVENTS UNDER THE PLACEMENT AGREEMENT • Chic Chic withdraws the Placement or any part of it; • there is a change to the board of directors, chief executive officer or chief financial officer of City Chic; • any certificate which is required to be provided by City Chic under the
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