admin AK Retail Holdings, a British fashion retail group, has acquired plus-size retailer Evans and the EMEA business of City Chic Collective Limited via an asset sale totalling eight million pounds.
In doing so, AK Retail, which most recently snapped up struggling retailer M&Co, has taken ownership of the Evans brand, intellectual property and customer base, as well as the Australian clothing group’s EMEA business.
The move to divest both Evans and its European subsidiary comes as part of City Chic’s ongoing strategic review to simplify and streamline the business in light of prevailing economic conditions.
According to its board, the decision to offload Evans ultimately helps to strengthen the group’s balance sheet, accelerate the reduction in its debt facility and reduce its inventory to allow for a clean inventory position “sooner than planned”.
Australia’s City Chic to close Navabi business and UK warehouse
In a release, City Chic’s CEO and managing director, Phil Ryan, said: “The focus of the strategic review has been on our online and international businesses to determine the most efficient way of returning to profitable growth.
“We have seen a significant deterioration in the EMEA market over the past two years which has hampered our ability to sell our expanded product range, compounded by global supply chain constraints.
“We are continuing with the rationalisation of our product offering, streamlining our supply chain and focusing on cost management.”
AK Retail Holdings will pay City Chic a total cash consideration of eight million pounds, with the net of transaction costs, including the closure of City Chic’s UK warehouse, totalling 6.4 million pounds.
As a result of the warehouse closure, where the company operates its European business, the German retail subsidiary Navabi will cease trading.
During a transition period, AK Retail Holdings will be able to sell all non-Evans branded products, while City Chic will be allowed to sell its remaining Evans-branded products in ANZ and North America.
Proceeds of the sale will be used for working capital purposes, City Chic said, paying for the group’s remaining 1.5 million dollar acquisition facility, and reducing its debt facility from 30 to 20 million dollars, with a further five million dollar reduction to be seen at the end of June 2024.
