City Chic Collective : Investor Presentation - Acquisition of UK-based brand Evans

Acquisition

21 December 2020

SUMMARY

• Acquisition of leading UK plus-size brand Evans from the Arcadia group
• Evans has a longstanding history of 90 years as a high street retailer
• Asset purchase of Evans eCommerce and wholesale businesses which generated £26m (A$46m) of sales1
• • Excludes "bricks and mortar" store portfolio and franchise business
  • Digital sales represent almost half of direct-to- consumer (stores and website) sales
• Significant and loyal customer following - 19m annual website visits1
• Platform to launch into the third key geography for the City Chic Collective; £5bn+ (A$9bn+) annually for UK women's plus-size market
• Cash consideration of £23.1m (A$41.0m), funded from existing cash
• Expected to be earnings accretive in the first full year

1. Financial year to August 2020 (12 months).	2

ACQUISITION OVERVIEW

Acquisition	• Acquisition includes Evans eCommerce and wholesale businesses for cash consideration of £23.1m (A$41.0m)
• Binding Asset Purchase Agreement signed on 19 December 2020
Overview
	• Acquisition will complete on 23 December 2020 and subject only to payment of cash consideration
Other	• Administrators are entitled to trade from the existing Evans stores until the end of March 2021, in order to liquidate
existing stock in the stores
Transaction	• Transition Services Agreement to be in operation until end of April 2021, after which the Evans business will be fully
Details
	integrated
	• CCX will acquire the Evans brand and intellectual property, customer base and inventory, which represents the key
	assets of the eCommerce and wholesale businesses
Assets &	• Select employees will transfer to City Chic as part of the acquisition
Liabilities
	• Transaction excludes the Evans "bricks and mortar" store network of over 100 locations in the UK and the franchise
	business, based primarily in the Middle East
Funding	• Cash consideration to be funded by existing cash balance
• $121.4m cash as at 30 November 2020; $40m finance facility undrawn

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ACCELERATES STRATEGIC OPPORTUNITY

Australia and NZ

North America

UK

FASHION / YOUTH		CONSERVATIVE VALUE		INTIMATES

• Online Website

• 96 Stores

				Market Share Expansion and
Greater Share of Wallet		Market Entry Opportunity
		Greater Share of Wallet

•

Online Websites

•

Online Marketplaces

CLOUDWALKER

•

Wholesale

Market Share Expansion /

Market Share Expansion /

Market Share Expansion and

Customer Acquisition

Customer Acquisition

Greater Share of Wallet

• Online Website

• Wholesale

Market Entry Opportunity + Broader Product Offering

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EVANS ACQUISITION HIGHLIGHTS

• Well recognised brand with strong position in underpenetrated UK plus-size market; significant and loyal customer following
• Provides scale and profitability in new market and a platform to expand further in the region
• Aligned to existing City Chic Collective product streams
• Leverage existing traffic and customer base to introduce wider range of product and lifestyles
• • Evans has a history as a Marketplace selling many other brands, including City Chic for five years
• High online penetration - store portfolio has been shrinking for many years with transition of customers to digital channel, which minimizes sales leakage from administration-led store liquidation
• Opportunity to improve profitability by overlaying lean, customer-centric operating model

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EVANS OPPORTUNITY

• Well recognised specialty retailer of plus-size apparel and footwear; established in 1930 in the United Kingdom
• Targeting a broad customer base across the conservative and fashion segments in the curvy market
• Independent UK website which sells predominately the Evans brand, as well as other plus-size brands
• Evans group (online, wholesale, stores and franchise) generated over £60m of annual sales prior to COVID

Post Acquisition Priorities

• Introduce a wider range of product and lifestyles
• Optimise as a digitally led business
• Expand wholesale partnerships
• Implement customer-centric operating model for UK operations
• Integrate supply chain, logistics and eCommerce platform

90 years	£5bn+
Established	UK Women's
History	Apparel Market

£23m	£3m
Annual	Annual
Online	Wholesale
Revenue1	Revenue1

19m	Digital
Annual	Online and Partner
Online	Model
Traffic1

1. Financial year to August 2020 (12 months).	6

A GLOBAL COLLECTIVE OF PLUS-SIZE BRANDS

									AC Q U I S I T I O N
							CLOUDWALKER
					Playwear &
Segment	Fashion Forward		Youth Casual			Conservative		Conservative
		Intimates Lifestyle
Age	18-35		18-25		18-39		35-55		25-55
Price	Mid/High		Mid/High		Mid-market		Mid-market		Mid-market
Point
	Online
Channel	Stores		Online		Online		Online		Online
Marketplace		Stores				Wholesale
	Wholesale
Region	ANZ, USA, UK, EU		ANZ, USA		ANZ, USA		USA		UK
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FINANCIAL POSITION AND FUNDING

• Acquisition to be funded by existing cash balance
• Binding asset purchase agreement for cash consideration of £23.1m
• Estimated transaction and transition costs of £1m and working capital investment of £3m
• Relatively low ongoing capital requirements
• A$40m debt facility remains undrawn

	A$m1
Cash as at 30 November 2020	121.4
Consideration for Evans Assets (£23m)	(41.0)
Estimated Transaction and Transition Costs (£1m)	(1.8)
Estimated Working Capital Investment (£3m)	(5.3)
Pro-Forma Cash Balance	73.3

1. Exchange Rate to $1.77 AUD to £1.00 GBP	8

IMPORTANT INFORMATION

This presentation has been prepared by City Chic Collective Limited (the "Company"). It contains general background information about the Company's activities and does not purport to be complete. It should be read in conjunction with the Company's other periodic and continuous disclosure announcements.

The Company has prepared this presentation based on information available to it, including information derived from publicly available sources that have not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, correctness or reliability of the information, opinions and conclusions expressed.

This presentation contains forward-looking statements. Forward-looking statements can generally be identified by the use of words such as "may", "will", "expect", "intend", "plan", "estimate", "project", "should", "could", "would", "target", "aim", "forecast", "anticipate", "believe", "continue", "objectives", "outlook", "guidance" or other similar expressions, as well as indications of and guidance on future earnings and financial position and performance. Forward-looking statements are not guarantees or predictions of future performance. They are prepared in good faith and are based on the Company's best estimates and information at the time of preparing the presentation. They are nonetheless subject to significant uncertainties and contingencies many of which are understandably beyond the Company's control. Unanticipated events will occur, and actual future events may differ materially from current expectations for many reasons including new business opportunities, as well as many other internal and external factors. Any of these factors may materially affect the Company's future business activities and financial results. This presentation should not be relied upon as a recommendation or forecast by the Company.

To the maximum extent permitted by law, none of the Company, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

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