City Chic set to announce divestment, capital raise as billionaire retail magnate Brett Blundy ups his stake

Plus-sized fashion retailer City Chic is preparing to announce a proposed divestment of its Avenue label and a capital raising, shortly after billionaire Brett Blundy pushed his stakes higher in the beleaguered business.

City Chic on Tuesday requested “back-to-back” trading halts of two trading days each until Monday to reveal more about the proposed divestment, as well as the fully underwritten institutional placement and a fully underwritten pro-rata accelerated non-renounceable entitlement offer of new ordinary shares.

An announcement regarding a change in substantial holding well after the market closed on Monday also revealed Mr Blundy’s Singapore-based BBFIT Investments purchased a combined total of 3.3 million shares for $920,670 across three transactions on June 13, 14 and 17.

This has boosted the group’s voting power from 9.9 per cent to 11.3 per cent.

Mr Blundy is already the chair of global jewellery chain Lovisa and owns a 40 per cent stake in the retailer through his investment vehicle BB Retail Capital.

He was also the former owner of shopping mall mainstays Sanity and Bras ‘n’ Things.

The news follows a tough trading period for City Chic, with the retailer in February revealing first-half sales hit $105.8 million, a 29 per cent drop on the same time last year.

It reported a loss for the first half of $7.5m, and active customers were down 11.4 per cent to 492,000.

At the time, City Chic chief executive Phil Ryan said the company was working to “rightsize” its cost base and sort its inventory, while revitalising its product range.

“While cost-of living-pressures are impacting transaction volumes, the feedback and sell-through on our new ranges has been encouraging and our new product is expected to support our return to profitable trading,” he said.

City Chic shares last traded at 30¢.