The City Chic Collective Ltd (ASX: CCX) share price has jumped more than 6% into the green this morning.
Today's gain comes as the company updated the market on a recent acquisition and its FY21 trading update.
Let's explore what City Chic announced in a bit more detail.
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Quick recap on City Chic
City Chic, formerly Specialty Fashion Group, is a women's fashion retailer. It's main focus is on the plus-sized women's clothing market.
The company has an online and in-store presence in more than 200 locations dotted across Australia, New Zealand, America and the United Kingdom.
City Chic currently has a market capitalisation of $1.3 billion.
Navabi acquisition
City Chic announced that on 23 June it had completed a "share purchase agreement to acquire 100% of the shares" in JPC United GmbH for $9.6 million.
JPC United is the sole operator of online marketplace Navabi, which sells "third-party women's plus size brands, as well as its own exclusive brands".
Navabi recorded sales revenue of $16.6 million with 5.8 million website visits in 2020. Before the pandemic hit, it recorded annual traffic in excess of 10 million visits.
City Chic will finance the transaction from its "existing cash balance", which came in at $71.5 million at the end of June.
The company also acquired all asset and liabilities on Navabi's balance sheet, including $3.3 million in cash "net of tax liabilities".
According to City Chic, the acquisition provided "a platform to expand further in Europe", thereby launching into its "fourth key geography".
FY21 result and trading update
In today's release, City Chic reported FY21 unaudited sales of of $258 million, a 33% year on year increase.
It also reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) expectations in the range of $42 – $42.5 million, calling for 58–60% growth from one year prior.
Regarding its trading update, the company stated:
Trading in FY22 has exceeded budget, with strong US and UK performance outweighing the impact of temporary store closures due to lockdowns in Australia.
At the time of writing, the City Chic share price is up 6.47%, trading at $5.76 after reaching an intraday high of $5.80. .
For context, the S&P/ASX 200 Index (ASX: XJO) has posted a return of 0.1% this morning.
Foolish takeaway
The City Chic share price has lifted 40% this year to date, extending the previous 12 month's return of 78%.
This has outpaced the broad index's return of ~22% over the previous year.
Investors can expect City Chic's fully audited FY21 results to be released on 26 August.
