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CCX - CITY CHIC COLLECTIVE LIMITED


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  • 3 months later...
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Quite a spring in the step today and not even a div.

It seems that Rivers is indeed turning around and online sales are doing pretty well.

I'll be going into Rivers next week maybe, haven't been there in a while, so I'll get a feel for how it's going.

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I felt a bit lonely when I topped up a couple of times when it dropped to 50 cents but now I am starting to thaw out. It can be incredibly difficult to swim against the market and at times like that I just have to close my eyes and think of J. P. Getty. But now they tell us that the Rivers' stock is cleared there are no more big obstacles in the way.

 

Another fear was whether the change in the targetted market would work - Rivers shifting its sights from the youth market to the middle market - but it seems to be working out OK.

 

Those who have not shopped in the U.S. may not appreciate what a presence in Nordstrom and Macy's represents. These could not have been easy to arrange. I am curious, however, as to how big a presence it is. I trust that it is more than token.

 

I am guessing that the share price will present more buying opportunities between reporting seasons.

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  • 2 years later...
City Chic Collective (ASX: CCX), which was previously known as Specialty Fashion Group, is a leading retailer in plus-sized fashion. We first invested in CCX in April 2018 after it sold five of its six brands to Noni B in order to concentrate on the City Chic brand and improve its balance sheet.

 

This week CCX reported its results, exceeding market expectations. The first half FY19 saw like-for-like store sales growth of 9.6% and earnings before interest, taxes, depreciation, and amortisation up 22%. Another bright spot was the 29% growth in online sales, their most profitable channel, with strong results from Australia, New Zealand and the US. Additionally, CCX declared a 2.5 cents per share dividend and a 2.5 cents per share special dividend, payable on 19 March 2019.

 

We continue to hold CCX as a research-driven investment in WAM Capital, WAM Research and WAM Microcap as we believe it has been able to generate strong store growth and has managed a successful entrance into the US market. The business has carved out a niche in plus-sized female apparel in all markets, and growth will come through online and new store roll outs. CCX shares closed up 43.9% for the week.

- Wilson Asset management

 

..... must have hurt a lot of punters on the way down

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  • 2 years later...

but then, someone is always willing to have a go:

CCX epitomises our earlier comment about reaping rewards greater than initially anticipated. When we first purchased the CCX, under its former name Specialty Fashion Group Ltd, we were aware of the potential of the City Chic brand, but did not fully appreciate the opportunity the business had in front of it. As management began to hone its acquisition strategy and elaborate on the opportunity in the womens plus size clothing market, it became apparent the growth potential was significantly larger than we had originally anticipated. As the adage goes, when the facts changed, we changed our minds. Management have demonstrated a disciplined and opportunistic approach to making acquisitions, which we think is uncommon. Recent bolt on acquisitions in the US, the UK and Europe have provided CCX with a global platform with which to sell its highly sought after fashion to an underserved consumer base. Today, the company has a small market share of a $100bn end market that is growing at 3 to 5% per annum, providing an opportunity for many years of organic growth. We expect the high quality management team at CCX to continue to deliver strong returns for shareholders for the foreseeable future.
Sandon Capital SNC FY report ....... been doing quite well. over $6 and has not been anywhere near that for a while

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  • 4 months later...

From a high of $6.50 in Nov to starting 2022 around $5.50, it has been an interesting 5 day roller coaster for CCX. A drop from above $5 to 4.50 early in the week, then bouncing along. Today, an update, with initial plunge to $4.30 but then a strong rebound back above $5.00

Trading Update for the 26 weeks to 26 December 2021

  •  Unaudited sales revenue of $178.3m delivering growth of 49.8% and comparable sales growth (CSG) of 44%.  
  • Unaudited Underlying EBITDA in the range of $22.5-23.5m, in line with the prior corresponding period. This was pleasing as it included a $4m EBITDA impact from store closures, the impact of acqusitions and COVID19 related marketing and cost reduction measures taken in the prior comparable period.
  • Post Balance Date completed the acquisition of customer lists, brand and URL of CoEdition, a USA plus size online marketplace.
  • Revenue growth has been supported by the strategic investment in inventory to proactively manage the risks associated with global supply chain volatility
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  • 4 months later...

Growth stocks have been punished, especially at the smaller and less liquid end of the market. Think of sectors like healthcare, discretionary retail and tech.

But what does that look like in terms of numbers? Glad you asked, as our friends at Deep Data Analytics have recently crunched the numbers and it is not pretty.

The worst 10 performers in the small cap healthcare sector are down ~32% on average, in discretionary retail the fall is ~49% and things get ugly in tech where the worst 10 are down ~54% on average.

No doubt many Livewire readers will have had some high growth names on the wishlist, but couldn’t stomach the valuations. So, we invited small cap specialists Josh Clark from QVG Capital and Gary Rollo from Montgomery Investment Management to see if a selection of market darlings are cheap enough to get them interested.

James Marlay: Slightly different tack now, we are going for City Chic Collective. It must have been one of the most popular and well earned retailers in the market. Buy, hold, or sell? It is down 60% in 2022.

Josh Clark (HOLD): That is brutal. It is painful just to think about. It is a hold for me, City Chic. It looks way too cheap. If they can continue their previous growth trajectory, then you would buy it. But naturally, it is down for a reason. They have got a lot of inventory coming into the balance sheet, so that is going to weaken the balance sheet. I think the jury is still out in terms of what gross profit margin they are going to be able to clear that inventory at, how long it is going to take them and what the balance sheet is going to look like on the other side of that. So I think those question marks mean that you need to hold off for the moment. You probably need to see a result or two for some evidence. There are a lot of other things to like, but for the moment, I think it is just a hold.

James Marlay: Hold on City Chic. Buy, hold or sell for you, Gary?

Gary Rollo (SELL): I can make a case for all three, but if I had to pick one, I would say it is a sell now. Now, this is a quality small cap and I think you mentioned the point that most small cap [investors] look at that business and say they want to own it, and we are no different. But we are not in normal markets right now. We are in an area, the consumer discretionary area, that is an area where you are going to have significant uncertainty on demand to play out. You have to ask yourself if you want to take that on, even in a stock that you would like to get invested in. Our view at the moment is no, we will not take that on. We'll wait and come back another day to buy that business so that's what we have decided. It is a sell.

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