retailers Lovisa, City Chic divide the market

Lovisa’s 81 stores in the United States and its presence in Europe and the United Kingdom helped offset slower business conditions in Australia, where it has 158 stores, New Zealand and Singapore.

During the half, inventory increased by $90 million, which was a combination of a decision to be “a bit heavier” in inventory levels as well as the opening of a warehouse in Poland. Last year. Lovisa also said cost pressures in global logistics have continued.

“Moderate” online growth

Meanwhile, shares of City Chic plunged more than 30% after doubling stocks and warning that online growth rates were more “subdued” at the start of the second half.

Online growth in the first half was strong, analyst Jarden Wassim Kisirwani told clients, noting it was over 40% in Australia and New Zealand and over 62% in the United States. United.

“Managing our supply chain to counter ongoing global disruptions and position the group for continued growth will remain a key objective in the second half of the year,” the group said.

“Inventory levels will continue to increase in the second half of FY22 to manage Lunar New Year shutdowns in China and in time for the Northern Hemisphere summer sale period.”

The company said increased inventory levels would reduce the group’s cash position and encourage the company to use the credit facility.

During the six months, investment in inventory doubled from $58.7 million to $125.7 million. Cash at December 26 was $38.7 million, down 45.9%.

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