Australia's City Chic to benefit from U.S.-based Torrid's change of strategy - UBS

Torrid Holdings

09/09/2022 02:41

** UBS says Australian plus-size women's apparel retailer
City Chic Collective Ltd  CCX.AX  revenue and inventory levels
will benefit from its American competitor, Torrid Holdings Inc's
 CURV.N  change in marketing and promotional strategy
    ** Adds Torrid is seeking to change its marketing strategy
to reduce site-wide promotions, replacing them with more
category-focused promotions based on inventory elasticity
    ** Says this change will be positive for CCX as promotional
intensity has recently elevated across plus size retailers
    ** Brokerage says since 12 months ending 1H20, CCX sales are
up 107% with inventory up 912%
    ** Further notes that even at the midpoint of the plan
announced to reduces FY23E inventory to A$125 mln ($84.83 mln)
to A$135 mln, it would still be up 253%  urn:newsml:reuters.com:*:nFWN3001M2
    ** Six of nine analysts rate the stock "buy" or higher, five
"hold" and none "sell" or lower; their median PT is A$2.60 –
Refinitiv data
    ** City Chic stock down 70.6% this year, as of last close
    
     ($1 = 1.4736 Australian dollars)

 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))