City Chic’s (ASX:CCX) US$16.5m acquisition of the e-commerce assets of American clothing chain Avenue has been given the green light from the US Bankruptcy Court.
Avenue is a US-based specialty retailer of plus size apparel, targeting value-conscious women aged 25 to 55. The company filed for bankruptcy in early August.
City Chic says the acquisition provides the company with access to a broader cross-section of the US plus size market which is estimated to be worth US$25 billion annually.
In court filings earlier this year, Avenue disclosed e-commerce sales of US$27m over the five months from January through May 2019. Whilst City Chic anticipates the closure of Avenue’s physical store network and the bankruptcy may have some impact on e-commerce sales, City Chic expects the acquisition to be earnings accretive.
Shares in City Chic (ASX:CCX) are trading 1.1 per cent higher at $2.83.