City Chic's aim to acquire US womenswear plus-size brand, Catherines, has been unsuccessful after it was outbid by USD $24.8 million.
The collapsed chain, Catherines, filed for Chapter 11 bankruptcy and the attempted purchase by the Aussie retailer was a part of the process by The Ascenia Group.
City Chic’s bid of USD $16 million for the retailer’s digital assets was bested by Fullbeauty Brands. The latter’s brand’s bid was more than double the Aussie’s offer, sitting at USD $40.8 million.
“Although it was disappointing not to win the assets at auction we have a very good understanding of the plus-size market and the value of the assets and we did not want to overpay,” said Phil Ryan, the CEO of City Chic.
“We have a focused strategy to grow our global digital presence and will execute this strategy through our extensive organic growth program and evaluating any inorganic opportunities on their merits.
“Given current market conditions we continue to see opportunities to add brands to our collective and more aggressively take market share organically,” he said.
City Chic’s shares have dropped as a result of the failed acquisition, falling as much as 15.6 percent on Thursday.
In July, City Chic raised $110 million and was nominated as the stalking horse bidder for Catherine’s e-commerce assets. City Chic currently has $112 in net cash and no debt.
If the acquisition of Catherines had been successful, the plus-size womenswear retailer would have increased its online sales by about USD $67 million, the AFR reported.
City Chic acquired Avenue in October 2019 and Hips ‘n’ Curves in the same year.
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