2023 ANNUAL REPORT
Contents
Overview
Message from our Chairman and CEO
Board of Directors
City Chic Annual Recap & Strategic Review
Our People
Environmental, Social and Corporate Governance
Annual Financial Report 2023
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 3
04180824121416 Annual Report 2023 | City Chic Collective Overview
EVERYDAY ESSENTIAL FASHION
FIERCELY FASHIONABLE
A GLOBAL COLLECTIVE OF PLUS-SIZE BRANDS
City Chic Collective is a global omni-channel retailer specialising in plus-size women’s apparel,
footwear and lingerie. It is a collective of customer-led brands and has a strong following in
Australia, New Zealand and USA. Our omni-channel model comprises of a network of stores
across Australia and New Zealand (ANZ) and websites operating in ANZ and the USA. The
collective of brands are also available through third-party marketplace and wholesale partners.
WE ARE A
WORLD OF
CURVES
GLOBAL
PLUS-SIZE
CUSTOMER LED
OMNI CHANNEL
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 5
Annual Report 2023 | 2023 Snapshot
2023 Snapshot
SALES
$268.4m
970k
ACTIVE CUSTOMERS1
ANNUAL ONLINE TRAFFIC2
49.9m
NUMBER OF STORES
86
76%
ONLINE PENETRATION3
688
EMPLOYEES
1,2,3 Please refer to page 119
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 7
Annual Report 2023 | Comments by our Chairman and CEO
Message from
Our Chairman and CEO
CHAIRMAN MICHAEL KAY
CEO & MANAGING DIRECTOR PHIL RYAN
Fellow shareholders, on behalf of the Board, we are
FINANCIAL PERFORMANCE OVERVIEW
Throughout the fiscal year, we undertook substantial
Our strategy revolves around three fundamental pillars:
pleased to present City Chic Collective’s Annual
The year saw us navigate challenging trading
promotional activities aimed at driving sales and
Report for the 2023 financial year. In what has been a
conditions across all of our markets, with increased
reducing our inventory levels. While these efforts
1. Amplifying our focus on HER – our valued
challenging year for City Chic we took decisive action
pressure on consumer demand necessitating heavy
were effective in rightsizing our inventory, they had
customers. By
forging genuine emotional
to address our inventory and balance sheet issues.
promotional activity to drive sales. We also prioritised
a notable impact on our margins. Our gross margin
connections and
leveraging
the extensive
We, and many other retailers, did not anticipate the
the rightsizing of our inventory base, reducing
declined by 18.7% as a percentage of revenue during
insights into her preferences, fit, fabric, and
material drop off in demand in all territories, but
inventory by 72.5% to $53.8 million, which is a more
FY23, with almost half of this decline attributed to
styling choices, we intend to target our higher-
particularly in our case in UK & Europe. Had we
appropriate level given current and forecast trading
inventory provisions and write-downs.
value customers, characterised by higher
known of the serious challenges to global demand
conditions. As a result, we achieved a net cash
selling prices,
increased
lifetime
values,
in advance, we would not have built inventory during
position of $10.9 million at the year-end, a $14.9m
Logistics costs increased on a global scale during
and a tendency for repeat purchases. We
FY22 in order to mitigate supply chain inflation risk
improvement on the prior year.
FY23. However, we have begun to observe a
anticipate
that
this approach will
lead
to
to the extent we did. This inventory build in turn
recent downward trend in these costs. Additionally,
higher Average Order Values (AOV), improved
led to heavy promotional activity as businesses
Revenue for the year from the continuing businesses
fulfillment costs increased due to higher storage
retention
rates, and enhanced profitability.
competed hard for the reduced demand in order to
(excluding EMEA) was $268.4 million, down 15.8%
expenses and inflationary pressures. To mitigate
clear inventory. Self-evidently, this had a very material
from FY22 (adjusted for the 53rd week in FY22),
these cost pressures, City Chic took proactive steps
2. Revitalizing our product assortments with a
impact on the FY23 performance. We have now
but up 7% compared to FY21. Underlying EBITDA
to streamline its warehousing operations, closing
keen emphasis on higher-value products.
cleared almost all the old inventory, we have taken
was a loss of $24 million, and NPAT from continuing
nine warehouses throughout the year, and engaged
Drawing upon our robust design and sourcing
action on our cost base (internal and supply chain) and
operations was a loss of $45 million.
in retendering freight contracts with our customers.
capabilities, we aim to offer a more refined
with newness and a tighter range of higher margin
product coming online and in stores in Q2FY23,
The ANZ market showed resilience during the
STRATEGIC REVIEW
and desirable product selection. The expected
outcomes include a return to a 60% gross
we are confident we can return the business to its
first half, maintaining steady trade, however as we
The comprehensive review undertaken during the
margin and achieving
three stock
turns.
traditional position of strength.
progressed into the second half, we saw a negative
year reaffirmed the substantial market opportunities
We also embarked on a strategic review to chart a
market, we witnessed signs of recovery in the latter
Furthermore, it has provided a clear direction for City
down costs. Through the streamlining of our
course back to profitability at the earliest opportunity.
part of the year. However, this was impacted by
Chic's return to profitability by refocusing on what
supply chain and the initiation of a significant cost
trend particularly in the online business. In the US
that exists in both the ANZ and US markets.
3. Simplifying our business operations and driving
This comprehensive review saw us evaluate our
movements within our warehousing infrastructure,
made us great.
international and online operations, identify areas
which affected our operational efficiency. We remain
for operational improvement and develop a strategic
committed to adapting and optimising our operations
roadmap. We reported the outcomes of this review
to best serve our markets.
with our FY23 result along with the actions we
are taking.
reduction program, we anticipate annualised cost
savings of $15 million, leading to a sustainable
cost base from the second half of 2024. These
cost savings will primarily be realised in logistics
and support functions in the ANZ and US markets.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 9
Annual Report 2023 | Comments by our Chairman and CEO
Notably, the EMEA region has posed particular
The board and management believe that the actions
challenges for City Chic over the past two years. In
taken resulting from our strategic review will bring
response, the Board made a strategic decision as
profitability back to the business, notwithstanding
part of its review to divest the Evans brand and close
the continued economic uncertainty. We have set
down the EMEA businesses post period end.
our sights on achieving this in the second half of
fiscal year 2024, and maintaining our positive cash
By redirecting resources and focusing on the ANZ and
position.
US markets, City Chic aims to consolidate its efforts
in areas with more promising prospects for growth
We extend our sincere thanks to shareholders who
and profitability. It has resulted in a less complex
have continued to support us through difficult times.
and more efficient business structure, supported by
We did not perform at an acceptable level in FY23
valuable customer data insights.
and particularly in the light of our track record of
success over many years. Through the changes we
STRENGTHENED FINANCIAL POSITION
have announced, we intend to reinstate that record of
The sale of Evans for GBP 8 million post the period
success as quickly as possible and we look forward
end has further strengthening our financial position.
to reporting on our progress in FY24 and beyond.
Our close collaboration with our banking partners
has ensured our banking facilities are aligned with
We would also like to thank our loyal customer base
the evolving needs of our business.
for their support at a time when their households
are under extreme inflationary pressure. We are
Post the sale of Evans, we have secured a $20 million
determined to provide you with excellent products
working capital facility, which will be strategically
at an affordable price that make you look and feel
stepped down to $15 million for the FY25 year. This
great. And finally, thank you to our hard working
is part of our broader strategy to strengthen our
and fantastic team members. With your passion and
financial resilience and position us for a more robust
energy, we will lead a world of curves.
future.
TRADING AND OUTLOOK
While early trading in FY24 was impacted by market
conditions and residual inventory clearance, we have
returned to a more commercial inventory position
to support sales from the second quarter with new
seasonal product. In line with our strategy, our focus
in the second half will be on high-value ranges and
high-value customers, and we are now in a much
better position.
Michael Kay
Chairman
Phil Ryan
CEO & Managing Director
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 11
Annual Report 2023 | Directors
Board of Directors
Chairman and Non-Executive Director
MICHAEL KAY
Michael Kay joined the City Chic Collective Limited Board on 1 October
2018 as an independent non-executive director and was subsequently
appointed Chairman on 9 November 2018. Mr. Kay has significant
listed company experience, as detailed more fully below, and is also
a non-executive director of the Pharmacy Guild of Australia (and its
various subsidiaries).
A qualified lawyer, Mr. Kay brings a broad range of commercial
experience to the Board. Mr. Kay was Chief Executive Officer and
Managing Director of McMillan Shakespeare Limited (ASX: MMS)
for six years and previously held a number of senior executive roles
at AAMI including Chief Executive Officer. He also spent 12 years in
private legal practice specialising in commercial law.
Chief Executive Officer and Managing Director
PHIL RYAN
Phil Ryan is the original Brand Director of City Chic. In 2006, Mr.
Ryan led a team of six people that created the City Chic brand. He is
responsible for the strategic direction and operational leadership that
has seen CCX take a market leading position in the global plus size
industry. Under Mr. Ryan's leadership, CCX now has more than 86
stores in Australia and New Zealand with online sales representing
more than 73% of total sales globally. Mr. Ryan has driven successful
partnerships with Nordstrom, Macy's, Target and Amazon in the USA.
Mr. Ryan is a global authority in the plus size consumer. He has
over 25 years’ experience in senior and strategic retail apparel
management. Mr. Ryan's family had a fashion manufacturing, wholesale
and retail business called Ambition in the 1980’s and 1990’s and from
this he knows all areas of a rag trade business; from the cutting table
to the retail shop floor.
Non-Executive Director
MEGAN QUINN
Megan Quinn joined the City Chic Collective Limited Board in October
2012 as an independent non-executive director. She has more than
30 years' international experience as a senior executive, advisor, and
Non-Executive Director across a broad range of industries including
financial and professional services, retail, luxury, healthcare, consumer
and digital.
Ms Quinn is recognised as an entrepreneur and global brand expert for
her game-changing role as a co-founder of NET-A-PORTER. She brings
exceptional customer, governance, strategic, marketing, operational
and business skills, with particular strength in people experience, digital
transformation, disruption, innovation, service and risk.
Non-Executive Director
NATALIE MCLEAN
Natalie McLean joined the City Chic Collective Limited Board on 5
August 2021 as an independent, non-executive director.
Mrs. McLean has over 25 years of retail experience having worked
in senior positions domestically in Australia and internationally with
companies including Giordano, Rip Curl and the Cotton On Group.
Mrs McLean has extensive experience across operations, product,
marketing and commercial areas of the retail sector including
partnership strategies and geographic growth. Mrs. McLean is
currently a director and the Chief Retail Officer of the Cotton On Group
and a director of the Cotton On Foundation.
Non-Executive Director
NEIL THOMPSON
Neil Thompson joined the City Chic Collective Limited Board on 5
August 2021 as an independent, non-executive director.
Mr. Thompson has over thirty years of financial, operational and
strategic experience from a broad range of roles and industries with
global reach, including freight and logistics, industrial products and
software sectors.
Mr. Thompson is currently a Finance Operating Partner at private
equity firm Potentia Capital and was previously the Chief Financial
Officer of Ascender HCM (a payroll software and services company).
He is also a director of the Australian World Orchestra.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 13
Annual Report 2023 | City Chic Annual Recap & Outlook
City Chic Annual Recap
OPERATIONAL AND STRATEGIC HIGHLIGHTS
• Navigating through challenging economic
conditions reducing inventory from $196m to $54m
• Closing net cash position of $10.9m
• Streamlined global fulfillment structure closing 9
warehouses, relocating the US warehouse and
retendering product delivery services
• Exited loss making EMEA business
• Delivered Strategic Review; The Path to
Profitable Growth
Strategic Review
THE PATH TO PROFITABLE GROWTH
As a result of the strategic review we are renewing focus on our core customer and product, simplifying
the business and reducing costs.
Amplify our focus on Her, forging genuine
emotional connections
• Put Her first: leverage our rich customer understanding developed over many years of
connection.
• Target our more valuable customer with attractive customer economics.
• Deliver products She sees value in that fit, exceed expectations and make Her feel amazing.
• Continue to listen and anticipate the evolving needs of HER.
Revitalise product assortments, focusing on
higher value product
• Simplify range and focus on high-value and fashionable styling.
• Deliver newness to drive customer engagement.
• Disciplined assortment management and shorter lead times.
• Creating styles that increase average sell price and deliver a better margin.
Simplify the business and drive down costs
• Focus on attractive core markets.
• Streamline the operating model.
• Simplifying our supply chain.
• Drive down operating costs.
• Create a culture of cost containment focused on delivering a quality garment at a
great price.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 15
Annual Report 2023 | Our People
Our People
Our ‘Core Capabilities’ are at the
foundation of our culture; they support
our goal and purpose to “lead a world
of curves.” Our Core Capabilities are the
skills and behaviours we use as guiding
principles to lead, grow and deliver
exceptional experiences for her, our
customer. The core capabilities are:
WE PUT HER FIRST
She is at the heart of every decision;
WE ARE PASSIONATE CONNECTORS
We love what we do, and we work as
one team;
WE KNOW IT, OWN IT, DO IT
We are knowledgeable, we are
accountable, and we are disciplined;
WE MOVE FAST, KEEP IT SIMPLE AND
THINK BIG PICTURE
We act decisively, react quickly and are
measured in our approach;
WE ARE FEARLESS AGILE THINKERS
We express ideas, take calculated risks,
and embrace change.
Who we are and How we do things
GENDER DIVERSITY
Leading a world of curves means putting her first, and
creating experiences that makes her feel courageous;
feel proud to identify as female; feel empowered to
embrace her individuality; and to respect and love the
skin she is in.
She is our customer, she is a member of our team, and
she is our leader. We listen to her.
We value the learnings we gain from her coming from
different backgrounds, experiences, and perspectives.
These learnings enable us to develop beautiful products
and create exceptional customer and work experiences
that understand, respect and meet the diverse needs,
preferences and goals she has. We endeavour to make
her feel good at every touchpoint and we are committed
to continuing to deliver on this promise, at all levels of
our business, as our global footprint expands.
Diversity and Inclusion
Our commitments also extend beyond her. We seek to
be a boundaryless organisation that ensures all team
members, regardless of gender identity or minority
group membership, have equal opportunity to enter,
learn and develop within our business.
We know that true workplace diversity recognises
and values the contribution of people from different
backgrounds, experiences and perspectives. The CCX
Diversity Policy is underpinned by a suite of policies and
practices that provide the support and structure needed
to facilitate these opportunities for each individual that
enters our workforce. We support the well-being of our
people through unlimited access to EAP which includes
a suite of specialist helplines specifically tailored to the
needs of minority groups. Our learning initiatives and
social/culture calendar aim to increase awareness and
empathy, and promote our people building genuine
connections across all levels of the organisation.
The proportion of women employed at different levels across the company as at the end of the reporting period
was as follows:
BOARD
2 of 4 non-executive directors on the Board are
woman; 2 of 5 Board members (including non-
executive and executive directors) are woman
C-SUITE
1 in 3 C-Suite leaders is a woman
LEADERSHIP TEAM
MANAGERS
WORKFORCE
71%
73%
96%
DIVERSITY OBJECTIVES
Objectives established for achieving diversity (including gender diversity) and progress towards achieving them
during FY2023 are set out below:
FY23 DIVERSITY OBJECTIVES
ACHIEVEMENT
Seek to maintain gender diversity in the composition of the Board and the
C-Suite Leadership Team of no less than 30% of each gender.
Achieved
Achieve a Sense of Belonging Score of 75% or above for all groups by FY23
Achieved
Introduce a Gender Affirmation Policy
Achieved
Undergo an end-to-end ‘Job Access’ assessment to ensure optimal access to
employees with a disability or impairment
Commenced,
ongoing in FY24
Our diversity strategy is supported by the following objectives established for FY2024:
FY24 DIVERSITY OBJECTIVES
Seek to maintain gender diversity in the composition of the Board and the C-Suite Leadership Team of
no less than 30% of each gender.
Continue end-to-end ‘Job Access’ assessment for all areas of the HR life cycle to ensure optimal
access to employees with a disability or impairment.
Commence corporate partnership with Dress for Success to provide fundraising support and clothing
to women seeking independence through employment.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 17
Annual Report 2023 | Acting Ethically & Responsibly
Environmental, social and
corporate governance
ESG across our supply chain
Seeking to create safe and respectful working environments for all workers in our supply
chain has long been, and remains, an overarching priority and focus. Over the last few
years with the acquisition of new brands and with the diversification of our sourcing
regions, we sought to partner with, and on-board, select new factories and vendors
into our supply chain and our ethical trade policies. This year we shifted our focus
on consolidating our supply chain and embedding key policies. As we placed more
emphasis on tracing high risk materials and regions, it led to streamlining our supply
chain where possible.
Our goal remains to work together with all our global partners to have a more positive
impact to people and planet.
People continue to be a focus for our organisation as we aim to improve
the lives of workers in our supply chain.
We consider every worker in our supply chain an extension of our own business and we
are working together with our factories to ensure safe and fair working conditions for
all of their employees. Our Ethical Trade program, developed and refined by our long
serving team committed to improving practices, outlines our expectations for ourselves
and our partners in our supply chain and seeks to hold us to account when it comes to
human rights impacts associated with producing our product.
Social Responsibility
Our FY2023 Highlights
• Continued to make progress against our Modern Slavery Act roadmap
•
Strengthen our Forced Labour policy and tracing
• Completed our pilot DNA / fingerprint testing on cotton product
•
Enhanced our chain of custody policy and process for all tiers of the product sourcing supply chain
• Achieved “NICE” Rating on the 2022 Oxfam ‘Naughty or Nice’ list, recognising our commitment to
working towards paying a living wage
• Ranked in the top 40% of companies assessed in the ‘Behind the Barcode Report’ / Ethical Fashion
Guide by Baptist World Aid
• Continued our engagement with key NGO’s
We commit to source product in a recognised, responsible, and transparent supply chain
It is important for us to continue to map all levels of our supply chain to understand all potential supply chain
risks. As we continue to trace through these layers, we are committed to publishing our supplier list with regular
updates.
61
Tier 1 Factories
3
Sourcing Regions
21,020
Workers in Tier 1
64%
Female Workers
MODERN SLAVERY UPDATE
As part of our modern slavery risk assessment, we identified that cotton production right back to farming was a
high-risk issue that we need to better understand and address.
CCX is committed to taking steps to try and ensure our supply chain does not source directly or indirectly from
known regions that openly engage in the use of forced labour, in line with our responsibilities under the UN
Guiding Principles on Business and Human Rights. In addition to strengthening our ban on known regions that
endorse the use of forced labour, we have implemented a more diligent tracing program and associated plan
for remediation. We worked closely with key suppliers to educate them on key indicators and documentation
required to comply with a robust chain of custody process. It is important for us to monitor and validate our
processes to assess their effectiveness.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 19
Annual Report 2023 | Acting Ethically & Responsibly
We finalised and completed our pilot program in cotton DNA testing, to help validate the origins and audit
The right of every worker in our supply chain to enjoy safe and healthy working conditions in an
products that are part of our supply chain. Testing across a randomly selected collection of products from the
environment where they are not exploited
supply chain was conducted by accredited 3rd Parties and our team also worked closely on validating chain of
custody documentation received from vendors as part of our due diligence.
We seek to partner with the vendors in our supply chain to ensure working conditions are clean and safe and
workers are not performing any unsafe work.
Working together to empower workers and give them a voice in the supply chain
As part of our Worker Voice Program, we were excited to roll out our worker survey tool to more factories and
As we expand and further diversify our sourcing regions, and manage Covid-related risks and travel restrictions,
we seek to check and monitor the working environment of workers in our supply chain through the use of our 3rd
party auditors.
new regions such as Bangladesh. The worker surveys are conducted alongside our factory social audits and are
New suppliers are onboarded into our Ethical Trade Program and as we audit factories, we assign a risk rating to
in addition to our worker hotline and grievance mechanisms, as another channel to talk to factory workers about
help prioritise corrective actions. Our audit program is one part of our vendor onboarding and it supports and sits
key themes such as:
• Modern Day Slavery
•
Labour Practices
• Health & Safety
• Worker Satisfaction
alongside our other ethical trade initiatives.
We understand that not all factories will be at the same stage in their ethical trade journey, however, we seek to
partner with factories who also are committed in coming on this journey with us. Our overall audit risk ratings and
tracker have been updated to reflect our scorecard across our total group of factories and we are pleased to see
Enhancing our worker voice tools is a key initiative to help support us in gaining a more direct line to all workers.
our average audit score improve.
It gives us the ability to contact workers by sending them surveys, training materials, and information to empower
workers to have a voice about their individual working conditions.
FY23 AUDIT RISK RATINGS
Working with factories to recognise that a minimum wage does not always equal a living wage
GREEN
73.8%
We commit to do our part in closing the gap between living wage and minimum wage. We recognise that multi
stakeholder initiatives are the best way to drive change and we look to global benchmarking to help determine a
basic living wage by region.
Through our audit process we train and then ask our factories to establish a living wage calculation. We believe
this empowers all factory owners in understanding what a living wage is made up of and how their wages paid
compare. It is important for us to monitor progress of all factories and as a result we have developed our living
wage tracker by recording factories that are:
•
Paying living wage
• On track to living wage = Paying above minimum wage
•
Paying minimum wage (but does not equal living wage)
Through the course of the year, we have worked with our auditing partners to develop a road map to implement a
deeper wage gap audit in key factories which we will commence in the coming year.
AMBER
19.7%
RED
6.6%
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 21
Annual Report 2023 | Acting Ethically & Responsibly
Environmental Sustainability
Our FY2023 Highlights
•
Introduced a selection of preferred fibres into select range of product
Preferred Materials
FIBRES
The fibres and materials we choose to use in our supply chain contribute to our overall impact and footprint. We
recognize that we need to work towards understanding where there is opportunity to use more sustainable fibres.
As a first step, we have initially introduced into a small amount of our product ranges a selection of “better” choice
fibres in which we have conducted diligent chain of custody processes to help certify that these fibres were
• Continued to developed more sustainable packaging options
sourced responsibly and were used in our product.
• Continued to build knowledge & capacity for future climate strategies
• Developed a risk assessment process on risks related to climate
• Organic cotton
•
•
•
Supima cotton
FSC approved viscose
FSC approved bamboo
• Recycled polyester
We care for the environment and the management of waste in our
supply chain
PACKAGING
As part of our audit program, we seek to ensure that all textile processing and
waste management is in line with the legislation of the manufacturing country.
Our audits include environmental and waste management checks for
1.
Legal Authorisations – such as the EIA
2. Solid & Hazardous wastes
3. Wastewater, Air Emissions and Noise
4. Energy & Water reductions
We request factories only use Oeko-tex 100 certified mills, which forms part of
our Tier 2 onboarding.
Implementing Initiatives to help Manage & Reduce our Footprint
Our current focus is on those areas where we believe we can help create
a more positive and immediate impact on our planet, while continuing to
offer affordable product to our customers. These areas include assessing
opportunities to utilise preferred materials across product and packaging.
We have been working with our distribution partners to develop satchels for eCommerce sales that have a
high recycled plastics content. Our distribution centres (DC) in Australia and the UK continued to transition their
satchels to a minimum of 65% made from recycled materials, and our DC in the USA have commenced the
introduction of updated satchels towards the latter part of the year.
This initiative will help contribute to reducing our footprint and driving a more positive impact on our planet.
As part of our global supply chain distribution responsibilities, we continued to register under the relevant
Extended Producer Responsibility schemes (EPR) in the UK, Germany and France. Extended Producer
Responsibility (EPR) for packaging aims to reduce the environmental and economic burdens of plastic waste
management for municipalities by extending producer responsibility to the end-of-life stage.
As part of this commitment, we have established a process to comply with EPR requirements across Europe and
UK for packing and textiles wastes and recycling.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 23
Annual Financial
Report 2023
Directors' Report
Remuneration Report
Auditor's Independence Declaration
Independent Auditor's Report to the Members
of City Chic Collective Limited
Annual Financial Statements
Corporate Governance Statement
Shareholder Information
Corporate Directory
Directors Report
The directors present their report, together with the financial statements, on the consolidated
entity (referred to hereafter as the 'Group', 'consolidated entity' or 'City Chic') consisting of City
Chic Collective Limited (referred to hereafter as the 'Company', 'parent entity' or 'CCX') and the
entities it controlled at the end of, or during, the 52-week period ended 2 July 2023 (2022: 53
week period ended 3 July 2022).
Directors
The following persons were directors of City Chic Collective Limited during the financial period and up to the date
of this report (unless otherwise stated):
Michael Kay
Megan Quinn
Phil Ryan
Neil Thompson
Natalie McLean
Other Key Management Personnel
Peter McClelland (Chief Financial Officer)
Company Secretary
Marta Kielich (resigned 21 July 2023)
Jacquie Shanahan (appointed 21 July 2023)
Peter McClelland (additional Company Secretary appointed 21 July 2023)
Principal activities
City Chic Collective is a global omni-channel retailer specialising in plus-size women’s apparel, footwear and
accessories. It is a collective of customer-led brands including City Chic, Avenue, CCX, Hips & Curves and Fox &
Royal. City Chic and CCX are better dressing for plus-sized women and its omni-channel model comprises of a
network of 86 stores across Australia and New Zealand (ANZ) and websites operating in ANZ and the US. Avenue
(US-based) targets a broad customer base across the conservative segment, with a long history and significant
online customer following. Hips & Curves and Fox & Royal are online intimate brands.
The business made the strategic decision to exit the EMEA region and the Evans and Navabi brands during the
period. The financial statements have reflected this decision, with the profit and loss presented for the continuing
operations in ANZ and USA and EMEA presented as a discontinued operation, with the related assets as held for
sale on 2 July 2023. The Evans business and EMEA inventory has been sold to a third party subsequent to year-end
via an asset sale and purchase agreement.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 25
Annual Financial Report 2023 | Directors Report2536118116115505157 Dividends
There were no dividends paid, recommended or declared with respect to the current financial period.
There were no dividends paid, recommended or declared with respect to the previous corresponding financial
period.
Operating and financial review
Prior to 2 July 2023, as part of its ongoing strategic review to simplify and streamline the business, City Chic made
the strategic decision to divest its EMEA operations and focus its resources on other parts of the Group. As such
the Consolidated statement of profit or loss and associated notes has been presented separately for continuing
business and discontinued operations, by separating EMEA from the FY23 and FY22 comparative information and
accounted for as an Asset Held for Sale in the FY23 Statement of Financial Position and associated notes.
The Group achieved revenue from continuing operations in FY23 of $268.4m (3 July 2022: $324.1m), representing
a reduction of 17.2% or 15.8% adjusted for the 53rd week in FY22. The net loss after tax for continuing operations in
FY23 was $45.0m (3 July 2022: net profit $24.4m).
At 2 July 2023 the continued operation closed with a net inventory balance of $53.8m (3 July 2022: $195.9m
including inventory held at EMEA), which is a more appropriate level given current and forecast trading conditions
and was a focus in FY23 to set the business up to implement its strategic plan into FY24 and beyond. The net cash
position was $10.9m (3 July 2022: Net debt $4.0m) a $14.9m improvement and driven by the reduction in inventory.
The Group experienced challenging market conditions and increased pressure on consumer demand in the current
year, negatively impacting sales and margin. Australia and New Zealand maintained year-on-year trade in the first
half but saw a negative trend in the second half of FY23, particularly for the online business. USA demand on the
other hand saw some signs of recovery in the second half but was negatively impacted by warehouse moves where
the build to capacity and optimisation of the new technologies was slower than expected.
Gross margin was impacted by higher promotional activity across all regions and channels to drive sales and clear
inventory however this did not drive the expected transaction growth. Logistics costs increased globally, increasing
product costs however we have seen these trend down in 2HY23. Fulfillment costs also increased from both
higher inventory levels increasing storage costs and inflationary pressures, however during the year the Company
successfully completed a strategic implementation of warehouse rationalisation and moves in the USA which will
deliver improved fulfillment costs per unit in future financial years.
The Group recognised material stock provisions and write-offs relating to duplicated duty costs for relocated
inventory, for fragmented stock and aged inventory to ensure a commercial position for inventory at year end. This
further negatively impacted gross margin. Operating expenses for the Group versus last year were down.
The year-end inventory balance was also impacted by foreign exchange rates, with USD held inventory translated
into higher in AUD reporting currency than the prior year. The inventory balance at year end of $53.8m finished
lower than the target ranges (even allowing for the sale of EMEA inventory) due to the active clearance programs,
inventory provisioning and reduced stock purchases in 2HY23.
The Underlying EBITDA from continuing operations post AASB16 was a loss of ($24.0m) (3 July 2022: $53.8m). The
Underlying EBIT from continuing operations was a loss of $40.2m (3 July 2022 profit: $39.3m). The Underlying NPAT
from continuing operations was a loss of $45.0m (3 July 2022 profit: $24.4m).
Losses attributable to the discontinued EMEA business of $54.7m resulted in Profit/(Loss) after income tax expense
for the period attributable to the owners of City Chic Collective Limited of ($99.8m) (3 July 2022 profit: $22.3m).
The Multi Currency Debt Facility was amended during FY23 according to business needs. In May 2023, the facility
was amended to reduce the facility limit from 3 July 2023 to $31.5m. From 1 January 2024 the limit will be reduced by
a further $5m, to $26.5m and from 1 April 2024 by a further $5m, to $21.5m. At year-end the Group had borrowings
of $1.5m (FY22: $14.0m) and net cash of $10.9m (FY22: net debt of $4.0m).
Subsequent to year end the facility was further amended post the sale of the Evans business (see the Matters
subsequent to the end of the financial period below for further detail).
Strategic Review
In FY23 City Chic completed a strategic review, focused on its online and international businesses, to determine the
most efficient path to profitable growth, notwithstanding the current economic pressures on customer demand and
competition. The outcome of the strategic review will see the business focus on three key areas:
AMPLIFY OUR FOCUS ON HER, FORGING GENUINE EMOTIONAL CONNECTIONS
City Chic will reinvigorate the emotional connection with its core customers by leveraging its strong understanding
of Her needs developed over the last 16 years. With extensive insights into her preferences, fit, fabric, and styling
choices, it will target customers with higher selling price, lifetime values and repeat purchase tendencies. City Chic
will leverage its expertise in higher sales value categories, notably dresses, where Her engagement with the brands
and products has demonstrated elevated satisfaction levels.
This strategy will target a higher average order values, retention rates and profitability across a refined customer
base. City Chic will focus its marketing investment on targeting these higher-value customers that already constitute
nearly half of its total database.
REVITALISE PRODUCT ASSORTMENTS, FOCUSING ON HIGHER VALUE PRODUCT
By leveraging its robust design and sourcing capabilities, the Group is streamlining its product range to focus on
core fits and stylish, high-quality options. It will offer a more refined and desirable assortment with fresh lifestyle
additions, at higher average selling prices that deliver better margins. This includes deliberately rationalising its
product offering away from lower priced styles. It will implement disciplined assortment management to continue
to deliver newness and also maintain the relentless streamlining of its supply chain agility to ensure a more rapid
response to evolving customer preferences.
City Chic is targeting a return to 60% gross margins and optimised investment to maintain commercial inventory
levels, which will also improve inventory stock turns.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 27
Annual Financial Report 2023 | Directors Report SIMPLIFYING THE BUSINESS AND DRIVING DOWN COSTS
City Chic has streamlined its supply chain by consolidating sourcing origins from 7 to 3 and destinations from 6 to
2, while reducing its factory base from 101 to 61 and its warehouses from 12 to 2. It has also initiated a significant
cost reduction program and is targeting fulfilment costs returning to 19% of revenue. Overall, this will result in a
sustainable cost base from 2H FY24 and annualised cost savings of $15m.
In line with the strategic objectives, the Group sold the Evans brand and assets and exited the EMEA region. This
has resulted in a leaner, more efficient business in ANZ and the US where its strategy has historically proven to be
successful, and the Group can deliver strong returns supported by data-driven insights and disciplined working
capital management.
FY24 Outlook
City Chic will enter FY24 with a healthy inventory position and positive net cash. The board and management
believe that the strategic plan will bring profitability back to the business, notwithstanding the continued economic
uncertainty. Our plan will implement a refreshed and focused customer and product strategy, targeting our high
value core customers with a product mix that delights her and is focused on better end garments. City Chic will also
implement cost reduction actions that will reduce costs by approximately $15m in the continuing business through
fulfillment and other cost initiatives, with marketing remaining variable to demand.
During Q1, City Chic will aggressively clear winter inventory in ANZ and Summer in the USA (predominantly the
residual EMEA inventory that was relocated) to set up for Q2 and the holiday period to drive sales with new product
ranges and at higher margins. Costs initiatives will be implemented during 1H FY24 and The Group expects to trade
profitably during H2 FY24 as the benefits of the Strategic Plan are realized.
Material business risks
The Group operates in an environment of change. The level of macro-economic and geopolitical uncertainty globally
is currently higher than usual. There are a range of factors, both general in nature and specific to the Group which
may impact the operating and financial performance of the Group. The impact of these risks is regularly reviewed
for their possible impact.
CHANGES TO MACROECONOMIC CONDITIONS AND CONSUMER DISCRETIONARY SPENDING
The Group has a significant exposure to the economy of the countries in which it operates. There are a
number of general economic conditions, including interest and exchange rate movements, CPI inflation,
geopolitical tensions, overall levels of demand, economic and political instability and government
fiscal, trade, monetary and regulatory policies, that can impact the level of consumer confidence
and discretionary retail spending. These conditions may affect revenue from sales to customers and
insufficient liquidity to maximise opportunities or maintaining operations. Management are actively
monitoring and managing the associated risks with daily monitoring of key metrics and adjusting areas
of operation based on both internal and external sources of information that provide insights into any
changes in demand within the economies in which it operates. During the reporting period the Group
executed a number of revisions to its debt facility to better reflect the anticipated trading performance of
the business and expected working capital needs
COMPETITION
The Group operates in a retail environment and financial performance is sensitive to the current state
of, and future changes in, the retail environment in the countries in which it operates. The retail fashion
market also continues to consolidate and feel the effects of globalisation. City Chic will continue to offer
customers quality and value for money and maintain a high online penetration, a global footprint and a
nimble and fast supply chain that adapts to changes within customer buying patterns.
Inventory is expected to trend toward our targeted 3 stock turns, excluding stock in transit and maintaining positive
ENVIRONMENTAL CHANGES
net cash at year end.
The Group is exposed to risks arising from environmental changes, including climate change, scarcity of
natural resources and the continuing global development of legislation and regulations in this area. Many
of these risks are greatest in the Group's supply chain activities and these activities and the related risks
are largely managed through the principles laid out in our corporate social responsibility disclosures.
The Group manages environmental risks, such as droughts and floods, along with the threat of raw
material scarcities by diversifying its vendors and material sourcing. The Group has dedicated resources
to ensure continued compliance across all regulatory requirements in the markets operated in by the
Group.
ETHICAL SOURCING AND MODERN SLAVERY
The Group is exposed to reputational and regulatory risk with regards to ethical sourcing and modern
slavery. City Chic is committed to sourcing product in a recognised, responsible, and transparent supply
chain, including taking steps to try and ensure our supply chain does not source directly or indirectly
from known regions that openly engage in the use of forced labour in line with our responsibilities
under the UN Guiding Principles on Business and Human Rights. The Group continues to enhance
and strengthen its ethical trade program with a focus on building a more transparent supply chain and
tightening its tracing of high-risk products, regions or raw materials to manage risks in relation to modern
slavery and to ensure continued compliance across all regulatory requirements in the markets operated
in by the Group.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 29
Annual Financial Report 2023 | Directors Report INVENTORY LEVELS
A failure to maintain appropriate inventory levels may adversely affect the Group’s operating and financial
performance. The Company seeks to manage this risk through regular monitoring of inventory quality
Significant changes in the state of affairs
There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
and targeted stock levels.
BUSINESS TRANSFORMATION RISKS
The Group has a plan to continue making investments in new technology systems including in logistics.
A failure to implement the new logistics technology changes may result in productivity and accuracy
issues leading to impact to sales. The Group is continuing to monitor KPI’s and forecasting as well as
engagement with 3PL providers.
EXCHANGE RATES AND DUTIES
The Group relies significantly on imported products (directly sourced or via local or overseas wholesalers)
and as a result the cost of the product may be subject to movements in the exchange rate of the
Australian dollar. The Group also has significant operations in the USA which provide a natural hedge
against currency movements on purchases. Any additional risk in exchange rate movement is monitored
and can be mitigated through the use of forward hedging. However it is noted that no hedges have been
put in place in FY23.
WORKPLACE HEALTH AND SAFETY (WHS)
The Group has 688 employees as well as the customers who visit physical stores across ANZ. The
Group has a high focus on WHS with regular WHS Committee meetings, investment in training and
development of its employees being a high priority.
TECHNOLOGY AVAILABILITY & CYBERSECURITY
The Group operates in an increasing complex environment in regard to reliance on technology and
the increasing threat to cyber security. This increasing reliance and the changing regulatory landscape
means that the related risk of any disruptions to systems, networks and data also continues to grow. Any
events or cyber security breaches could cause significant business and reputational damage, adverse
regulatory action (including legal proceedings) and financial impacts on the business.
Whilst it is not possible to reduce the cyber security risk to zero, Management is actively working to
materially reduce these risks by increasing our investment in our cyber control environment, following
the Australian Cyber Security Centre’s “Essential Eight” and the NIST Cybersecurity Framework. Cyber
security is overseen by our Board, Audit and Risk Committee and Group Executives, and external cyber
security consultants are used to test and validate cyber security procedures that have been implemented.
COVID-19 PANDEMIC
The COVID-19 pandemic had a significant impact on the business in FY22 with normal trading conditions
restored in FY23 as the Company was directly or indirectly affected by government, regulatory or
health authority actions, work stoppages, lockdowns, quarantines and travel restrictions associated with
COVID-19, including disruption to City Chic’s supply chain and workforce, particularly the availability
of products and logistics (including shipping of products) and government-imposed shutdowns of
manufacturing and distribution centres affecting the supply of products to customers. The World Health
Organisation in May 2023 declared the end of the COVID-19 as a global pandemic.
Matters subsequent to the end of the financial period
On 3 August 2023, the Group divested the Evans business and EMEA inventory via an asset sale and purchase
agreement (the Agreement). Under the Agreement, the Evans brand, intellectual property, customer base and all
EMEA inventory has been sold for a total cash consideration of £8m (c. $15.5m AUD). Net of transaction costs, and
the closure of City Chic’s UK warehouse, the consideration is c. £6.4m (c. $12m AUD).
City Chic has agreed with its 3PL provider to close its UK warehouse which also supports its European operations.
As a result, the Navabi business has ceased trading. City Chic retains the right to trade under the City Chic, Avenue
and other non-Evans brands in EMEA in the future.
The transaction has been reflected in the financial statements at 2 July 2023, with the related assets presented as
assets held for sale and impaired to the anticipated recoverable value through the sale. The related impairment was
$29.4m. The EMEA business has also been presented as a discontinued operations in the FY23 statement of profit
and loss, along with the comparative FY22 information.
The proceeds from the sale of Evans have been used for working capital purposes and to pay down and cancel
the Group’s remaining $1.5 million acquisition facility. From 9 August 2023, the multi-currency debt facility was also
amended to $20m (from $31.5m) and will reduce by a further $5m at the end of June 2024.
No other matters or circumstance has arisen since 2 July 2023 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs
in future financial years.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 31
Annual Financial Report 2023 | Directors Report
Information on directors
MICHAEL KAY
TITLE:
Chairman and non-executive director
QUALIFICATIONS:
B.LLB
EXPERIENCE AND EXPERTISE:
Michael Kay joined the City Chic Collective Limited Board on 1 October 2018 as an
independent non-executive director and was subsequently appointed Chairman on
9 November 2018. Mr. Kay has significant listed company experience, as detailed
more fully below, and is also a non-executive director of the Pharmacy Guild of
Australia (and its various subsidiaries). A qualified lawyer, Mr. Kay brings a broad
range of commercial experience to the Board. Mr. Kay was Chief Executive Officer
and Managing Director of McMillan Shakespeare Limited (ASX: MMS) for six years
and previously held a number of senior executive roles at AAMI including Chief
Executive Officer. He also spent 12 years in private legal practice specialising in
commercial law.
OTHER CURRENT DIRECTORSHIPS: Mr. Kay is currently Chairman of Omni Bridgeway Ltd (ASX: OBL) (formerly called
IMF Betham Limited (ASX: IMF) (since July 2015).
FORMER DIRECTORSHIPS (LAST 3
YEARS):
None
SPECIAL RESPONSIBILITIES:
Chairman of the Board; Member of the Audit and Risk Committee (ARC); Member of
the People, Culture and Remuneration Committee (PCRC)
INTERESTS IN SHARES:
1,000,000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
MEGAN QUINN
TITLE:
Non-executive director
QUALIFICATIONS:
GAICD
EXPERIENCE AND EXPERTISE:
Megan Quinn joined the City Chic Collective Limited Board in October 2012 as
an independent non-executive director. She is a specialist consultant working
across a broad range of industries including financial and professional services,
healthcare, consumer and digital, and is an international speaker. Ms. Quinn has
more than 25 years’ experience working internationally with organisations including
Harrods, Dell and Westpac. Ms Quinn was also a Board and National Committee
member of UNICEF Australia. Her strong strategic, operational, supply chain and
financial expertise is complemented by her capabilities around brand, marketing,
innovation, transformation, digital, and customer service and experience across all
channels. She is recognised as a global brand expert for her game-changing role
as a co-founder of NET-A-PORTER. Known for her creative, energetic and disruptive
thinking, Ms. Quinn has the unique ability to define gaps in the market and develop
market-leading business strategies for commercial and creative outcomes.
OTHER CURRENT DIRECTORSHIPS: Ms. Quinn is currently a non-executive director at Reece Limited (ASX:REH) (since
August 2017), InvoCare Limited (ASX:IVC) (since October 2018) and The Lottery
Corporation (ASX: TLC) (since June 2022).
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chair of the PCRC; Member of the ARC
INTERESTS IN SHARES:
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
None
NEIL THOMPSON
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Ec
EXPERIENCE AND EXPERTISE:
Neil Thompson joined the City Chic Collective Limited Board on 5 August 2021 as an
independent, non-executive director.
Mr. Thompson has over thirty years of financial, operational and strategic experience
from a broad range of roles and industries with global reach, including freight and
logistics, industrial products and software sectors.
Mr. Thompson is currently a Finance Operating Partner at private equity firm Potentia
Capital and was previously the Chief Financial Officer of Ascender HCM (a payroll
software and services company). He is also a director of the Australian World
Orchestra.
OTHER CURRENT DIRECTORSHIPS: Mr. Thompson does not hold any other listed company directorships.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mr. Thompson has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Chair of the ARC; Member of the PCRC
INTERESTS IN SHARES:
100,000 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
NATALIE MCLEAN
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
B.Bus
EXPERIENCE AND EXPERTISE:
Natalie McLean joined the City Chic Collective Limited Board on 5 August 2021 as
an independent, non-executive director.
Mrs. McLean has over 25 years of retail experience having worked in senior
positions domestically in Australia and internationally with companies including
Giordano, Rip Curl and the Cotton On Group. Mrs McLean has extensive experience
across operations, product, marketing and commercial areas of the retail sector
including partnership strategies and geographic growth. Mrs. McLean is currently
a director and the Chief Retail Officer of the Cotton On Group and a director of the
Cotton On Foundation.
OTHER CURRENT DIRECTORSHIPS: Mrs. McLean does not hold any other listed company directorships.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mrs. McLean has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Member of the ARC; Member of the PCRC
INTERESTS IN SHARES:
10,900 ordinary shares
INTERESTS IN OPTIONS:
INTERESTS IN RIGHTS:
None
None
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 33
Annual Financial Report 2023 | Directors Report PHIL RYAN
TITLE:
Chief Executive Officer and Managing Director
QUALIFICATIONS:
MBA, B.Bus
EXPERIENCE AND EXPERTISE:
Phil Ryan is the original Brand Director of City Chic. In 2006, Mr. Ryan led a team
of six people that created the City Chic brand. He is responsible for the strategic
direction and operational leadership that has seen CCX take a market leading
position in the global plus size industry. Under Mr. Ryan's leadership, CCX now has
more than 86 stores in Australia and New Zealand with online sales representing
more than 73% of total sales globally. Mr. Ryan has driven successful partnerships
with Nordstrom, Macy's, Target and Amazon in the USA. Mr. Ryan is a global
authority in the plus size consumer. He has over 25 years’ experience in senior and
strategic retail apparel management. Mr. Ryan's family had a fashion manufacturing,
wholesale and retail business called Ambition in the 1980’s and 1990’s and from
this he knows all areas of a rag trade business; from the cutting table to the retail
shop floor.
OTHER CURRENT DIRECTORSHIPS: None
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chief Executive Officer; Managing Director
INTERESTS IN SHARES:
378,956 ordinary shares
INTERESTS IN OPTIONS:
2,161,235 ordinary shares issued under CCX's 2019 Employee Share Plan and
escrow provisions
INTERESTS IN RIGHTS:
1,200,000 performance rights over ordinary shares
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other
types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
On 21 July 2023, Ms Jacquie Shanahan, who has extensive experience across company secretariat, legal and
governance roles, joined as Company Secretary and General Counsel.
On 21 July 2023, Mr Peter McClelland, Chief Financial Officer, was also appointed as an additional Company
Secretary.
The former Company Secretary was Marta Kielich. Ms Kielich was appointed to the position of General Counsel and
Company Secretary on 7 July 2020 and resigned on 21 July 2023. Ms. Kielich has held company secretarial and
senior legal positions for several ASX-listed companies. Ms. Kielich also has broad international experience across
various sectors.
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during
the period ended 2 July 2023, and the number of meetings attended by each director were:
Full Board
PCRC
ARC
Attended
Held
Attended
Held
Attended
Held
Michael Kay
Megan Quinn
Natalie McLean
Neil Thompson
Phil Ryan1
25
25
23
25
25
25
25
25
25
25
3
3
3
3
3
3
3
3
5
5
5
5
5
5
5
5
N/A
N/A
N/A
N/A
Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.
Retirement, election and continuation in office of directors
At the 2022 Annual General Meeting ("AGM") held on 25 November 2022, 99.35% of the votes received supported
the re-election of director Megan Quinn as part of the Company's constitution that specifies all directors must stand
for re-election at least every three years.
1 Phil Ryan is not a member of either the PCRC or the ARC, but was invited to attend these meetings and his attendance was noted in the
minutes.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 35
Annual Financial Report 2023 | Directors Report
Remuneration report (audited)
The remuneration report, which has been audited as required by section 308(3C) of the
Corporations Act 2001, outlines the key management personnel remuneration arrangements for
the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
b. Remuneration strategy and policy
The People, Culture and Remuneration Committee (referred to hereafter as the “PCRC” or the ‘Committee’) is
responsible for assisting and advising the Board in relation to remuneration arrangements for its directors and
executives. The performance of the consolidated entity depends on the quality of its directors and executives. The
remuneration philosophy is to attract and retain talented and motivated executives who can enhance the Group’s
performance through their contributions and leadership.
The remuneration report is set out under the following main headings:
USE OF REMUNERATION CONSULTANTS
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Introduction
Remuneration strategy and policy
Remuneration framework
Remuneration outcomes for key management personnel
Service agreements
Disclosures relating to share options and performance rights
Additional disclosures relating to key management personnel
a. Introduction
This report outlines the remuneration strategy, framework, and other conditions of employment for key management
personnel and details the role and accountabilities of the Board and relevant Committees that support the Board
on these matters. Key Management Personnel (KMP) are those persons having authority and responsibility for
planning, directing and controlling the activities of the entity, directly or indirectly, including all directors.
Key management personnel of the consolidated entity were also the key management personnel of City Chic
Collective Limited (the parent entity) for the years ended 2 July 2023 and 3 July 2022. The key management
personnel consisted of the following directors and senior executives of City Chic Collective Limited:
Name
Non-executive directors:
Michael Kay
Megan Quinn
Natalie McLean
Neil Thompson
Executive directors:
Phil Ryan
Role
Chairman and non-executive director
Non-executive director
Non-executive director
Non-executive director
Chief Executive Officer and Managing Director
Other key management personnel:
Peter McClelland
Chief Financial Officer
The Board and / or the PCRC may, from time to time, appoint and engage independent advisors directly in relation
to remuneration matters. During the reporting period, remuneration consultants were engaged by the Group,
through the PCRC and provided a range of independent advice and information relevant to a range of remuneration
matters, in particular incentive structures for executives. The Board did not, however, receive any remuneration
recommendations from a remuneration consultant as defined by the Corporations Act 2001 (Cth).
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
PRINCIPLE 1
PRINCIPLE 2
PRINCIPLE 3
The objectives of the Group’s
The reward framework is
Alignment to program
executive remuneration
framework are as follows:
• competitiveness and
sustainability;
• acceptability to the
Group's strategic and
business objectives
and the creation of
shareholder value;
• performance linkage/
alignment of executive
compensation;
•
transparency and
acceptability to
shareholders.
designed to align executive
participants' interests:
reward to the Company’s
•
rewards capability and
interests. The Board have
experience
considered that it should
•
reflects competitive
seek to enhance the
Company’s interests by:
reward for profitable
growth and the
•
including economic profit
achievement of key
as a component of plan
business objectives which
design and the successful
drive value creation over
execution of strategic or
the medium term; and
operational initiatives; and
• provides a clear structure
• attracting and retaining
for earning rewards.
high calibre executives.
Remuneration policies are developed to provide market competitive remuneration arrangements that support the
attraction, engagement and retention of talented team members, and that are aligned with the Company’s interests.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 37
Annual Financial Report 2023 | Directors Report
c. Remuneration framework
In accordance with best practice corporate governance, the structures of non-executive directors and executive
remuneration are separate.
(i) NON-EXECUTIVE DIRECTORS' REMUNERATION
Non-executive directors receive fees and do not receive share-based payments or other incentives. The Chairman's
fees are determined independently to the fees of other non-executive directors and are based on comparable roles
in the external market. The Chairman does not participate in any discussions relating to determination of his own
remuneration. The PCRC review non-executive directors’ fees and payments annually. The PCRC may, from time
to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and
payments are appropriate and in line with the market.
ASX listing rules require the maximum aggregate non-executive directors' remuneration be determined by a general
meeting. The most recent determination was at the Annual General Meeting held on 21 November 2019, where the
shareholders approved a maximum annual aggregate remuneration of $1,000,000. The PCRC has reviewed the fee
and deemed the maximum annual aggregate remuneration is still appropriate.
Up to 27 February 2023, non-executive chairman and non-executive directors’ fees set for FY23 were as follows:
Role
Base fee for Non-Executive Chairman
Base fee for Non-Executive Director
Additional fee for Chair of the ARC
Additional fee for Chair of the PCRC
Remuneration (per annum,
exclusive of superannuation)
$
240,000
120,000
20,000
10,000
Following the release of the Group’s half year results in February 2023 and reflecting on the Group’s half-year
performance, the non-executive chairman and the non-executive directors elected to reduce their fees for the
remainder of FY23 and until otherwise determined. The non-executive chairman and non-executive directors’ fees
from 27 February 2023 were as follows:
(ii) EXECUTIVE DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL (KMP)
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration
that has both fixed and variable components, as well as a blend of short and long-term incentives. Executive
remuneration comprises base pay and benefits, short-term incentives, long-term incentives, and superannuation
contributions.
FIXED REMUNERATION
Executives receive a base pay and benefits which reflect their roles, experience and level of responsibility. This
is reviewed annually to ensure the executive’s pay is competitive with the market. Other benefits include car and
travel allowances.
SHORT-TERM INCENTIVES
The PCRC reviews the short-term incentives (STI) for executives and employees annually. If the PCRC determines
that STI should be made available for executives and/or employees, the cash incentives (bonuses) are payable
should the Group achieve pre-determined targets following finalisation and announcement of the full year audited
results. Using value creation targets ensures variable awards are only available when value has been created for
shareholders and when profit is consistent with the business plan. The PCRC considers the appropriate targets and
KPIs to link the STI plan and the level of payout if targets are met. This includes setting any maximum payout under
the STI plan, and minimum levels of performance to trigger payment of STI.
For the year ended 2 July 2023, the PCRC had determined that KMP-level executives would be eligible for an
STI plan of up to 1/3 of fixed remuneration (in addition to their long-term or equity-based incentive) if growth in
underlying EBITDA was achieved for FY23. As a result of the Group’s performance and relevant hurdles not being
met, no amount is payable to the KMPs as STI in FY23.
LONG-TERM INCENTIVES
The Group’s long-term incentives (LTI) rewards executives for high performance and ongoing commitment over a
three to five-year horizon and recognises the important role executives play in delivering the long-term growth of the
Group. As outlined in the notice of meeting for the 2022 Annual General Meeting, the PCRC spent a considerable
amount of time considering the remuneration of executives in this period of unprecedented global uncertainty,
and it was determined that the Company’s and Shareholders’ interests would be best served over the course
of FY23 by management focussing on delivering a strong balance sheet and generating cash flows. Based on
these considerations it was proposed that performance rights would be issued under the LTIP (defined below) with
respect to the FY23 reporting period and vesting of those rights would be conditional on meeting hurdles in relation
to achievement of a stated cash conversion ratio and inventory balance for FY23, as well as continued employment
until the end of FY25 (FY23 LTIPS).
Role
Base fee for Non-Executive Chairman
Base fee for Non-Executive Director
Additional fee for Chair of the ARC (unchanged)
Additional fee for Chair of the PCRC (unchanged)
Remuneration (per annum,
exclusive of superannuation)
Following the release of the Groups half year results in February 2023 and reflecting on the Group’s half-year
performance, the KMPs elected to forego the entitlement to the grant of the FY23 LTIPs.
$
200,000
100,000
20,000
10,000
In the case of the CEO’s FY23 LTIPS which had been approved by shareholders at the 2022 AGM, these FY23 LTIPS
were cancelled. In the case of the CFO and other members of the senior management team eligible to participate
in the FY23 LTIP, no FY23 LTIPS were ultimately issued/granted.
Consequently, no issue of equity-based incentives were made under the Group’s equity incentive plans (referred to
as the LTIP and the LFSP below) during the financial period. Further information about the proposed grant of FY23
equity-based incentives is available below.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 39
Annual Financial Report 2023 | Directors Report
LONG TERM INCENTIVES
Tranche 4*
The Group’s long-term incentive plans are equity based and comprise Performance Rights issued under the Long
Term Incentive Plan (LTIP) and Loan Funded Shares issued under the Loan Funded Share Plan (LFSP). Performance
Rights and Loan Funded Shares on issue during the current year were:
Tranche Grant date Performance
period end
date
Fair
Value
Share price
grant date
Expected
volatility
Dividend
yield %
Risk-free
interest
rate %
Balance at
the start of
the period
Granted Vested Expired/
forfeited
Balance at
the end of
the period
2C
4
13/11/2018 30/06/2023 $0.995
N/A
25/11/2022 30/06/2025
$1.17
$1.32
40.00%
40.00%
3.50%
0%
N/A
2.33% 2,300,000
-
- 490,419
-
- 2,300,000
-
(490,419)
Total Performance Rights
2,300,000 490,419
- (490,419) 2,300,000
3
3
3
21/11/2019 30/06/2024 $0.739
$0.731
03/03/2020 30/06/2024
16/09/2020 30/06/2024 $0.970
$2.68
$2.79
$3.33
35.00%
35.00%
40.00%
N/A
N/A
N/A
0.81% 6,298,457
667,464
0.81%
474,576
0.29%
Total Loan Funded Shares
7,440,497
-
-
-
-
-
-
-
-
-
-
-
-
6,298,457
667,464
474,576
7,440,497
Note: During the current reporting period, the impact from the forfeiture of 818,182 loan funded shares under Tranche 3 has been
reflected in the statements of profit and loss and the share-based payment reserve. The actual share buy back and cancellation
of the loan funded shares will occur in the next financial period.
LTIP TRANCHES
Vesting conditions of the LTIP tranches are set out below.
Tranche 2C
Vesting Condition 1
Continued service to August 2023, with no holding lock on resulting shares.
Vesting Condition 2
Group EPS (underlying before income tax and share-based payments) performance
in accordance with the following schedule:
Group EPS for the year to 30 June 2023
Proportion of Tranche 2C Performance Rights held that will
satisfy Vesting Condition 2
Below $0.1125 (1.5 x FY18 EPS)
$0.1125 ≤ EPS < $0.1200 (1.6 x FY18 EPS)
$0.1200 ≤ EPS < $0.1275 (1.7 x FY18 EPS)
EPS ≥ $0.1275
Nil
50%
75%
100%
As the Group EPS for the year ended 2 July 2023 finished below the minimum performance threshold, all Tranche
2C performance rights have been valued at nil at 2 July 2023. The rights themselves will only lapse in August 2023.
Vesting Condition 1
Cash conversion ratio weighting 50%
Vesting Condition 2
Inventory balance weighting 50%
Vesting Condition 3
Continued service up to and including 30 June 2025
Group Cash conversion ratio for the year to 2 July
2023
Proportion of Tranche 4 Performance Rights held that will satisfy
Vesting Condition 1
1.2 (threshold)
1.5 (target)
0%
100%
Between threshold and target level
Straight line pro rata basis between the threshold and target level.
Group Cash inventory balance for the year to 2 July
2023
Proportion of Tranche 4 Performance Rights held that will satisfy
Vesting Condition 2
$135 million (threshold)
$125 million (target)
0%
100%
Between threshold and target level
Straight line pro rata basis between the threshold and target level.
*Tranche 4 comprises of the FY23 LTIP granted to the CEO following approval by shareholders, at the Company AGM on 25
November 2022. Following the release of the Group’s half year results in February 2023 and reflecting on the Group’s half-year
performance, the FY23 LTIP granted to the CEO was cancelled on 27 February 2023. No other FY23 LTIP was issued to any
other employee. The FY23 LTIP issued to the CEO was expensed during the period, to the extent that it was likely to vest. Refer
to Note 20 of the financial statements.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 41
Annual Financial Report 2023 | Directors Report LFSP TRANCHE
The key terms of the LFSP are listed as follows:
d. Remuneration outcomes for key management personnel
•
•
•
Loan Funded ("LF") shares are issued at the Company's share price on the ASX at the time of issue.
(a) Payments and benefits
The Company advances money to pay for the subscription price of the LF Shares (Loan).
The Loan has an interest payable of 1.9% and is repayable on the earlier of cessation of employment (6 or 12
AMOUNTS OF REMUNERATION
month grace periods may be applied) or 7 years from the agreement by the Board to issue LF Shares under the
Details of the remuneration of key management personnel of the consolidated entity are set out in the
Plan (Vesting Period is 5 years to 30 June 2024).
•
The Company's recourse in the event it seeks to recover the Loan is limited to the LF Shares. Where a Participant
does not repay the Loan by the repayment date, the Participant is deemed to have agreed to sell to the
Company pursuant to an employee share scheme buy-back, that number of LF shares required to repay the
Loan to the Company.
•
The Company will apply the after-tax amount of any dividends payable in respect of a Participant's LF Shares
towards repayment of the outstanding balance of the Loan.
•
The LF Shares offered are subject to Vesting Conditions, which if not met, the unvested LF Shares will be
forfeited and bought back by the Company at the issue price and the Loan will be deemed repaid.
Vesting conditions of the LF Shares are set out below:
Tranche 3
Vesting Condition 1
Continued service to 30 June 2024.
following tables.
2023
Non-executive directors:
Michael Kay
Megan Quinn
Natalie McLean
Neil Thompson
Executive directors:
Phil Ryan
Cash
salary &
fees
Total
short-term
Post
employment
Superannuation
Other leave
benefits (A)
Share-based
payments (B)
Total
$
$
226,154
123,077
113,077
133,077
226,154
123,077
113,077
133,077
$
23,185
12,944
11,892
13,996
$
-
-
-
-
$
-
-
-
-
$
249,339
136,021
124,969
147,073
Proportion of
performance
related
remuneration
%
0%
0%
0%
0%
938,837
938,837
27,500
88,235
(667,890)*
386,682
(173%)*
Other key management personnel:
Peter McClelland
496,596
496,596
2,030,818
2,030,818
27,500
117,017
49,221
-
573,317
0%
137,456
-667,890
1,617,401
(A) In accordance with AASB 119 Employee Benefits, accrued annual leave and long service leave is classified as
Vesting Condition 2
Compound annual growth rate (CAGR) in the Group's earnings per share after tax (ADEPS)
other long-term employee benefit.
prescribed by the Board over the 3 year period commencing on 1 July 2019, in which
case (subject to satisfaction of Vesting Period Condition), the LF shares held will vest in
accordance with the following scale:
AEPS 3-year CAGR from 1 July 2019
Proportion of Tranche 3 LF shares that will satisfy Vesting Condition 2
12.5%
20%
25%
100%
(B) The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award multiplied by probability of vesting. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts already recognised in previous periods. In 2023 the balance
represents a release in the accrual for Tranche 2C which did not meet the vesting conditions, partly offset by
remaining Tranches.
12.5% ≤ EPS CAGR ≤ 20.0%
Straight-line pro rata vesting between 25% and 100% (inclusive)
* Negative share-based payments and proportion of remuneration as a result of reversal of LTIP accruals from prior
Vesting Condition 2 was eligible for testing on 3 July 2022. The ADEPS 3-year CAGR from 1 July 2019 to 3 July 2022
was 16.8% meeting the performance threshold for Vesting Condition 2. The proportion of Tranche 3 LF shares that
will satisfy Vesting Condition 2 is 66.3%. The Group has recognised $1.0m in expense in FY23. Vesting Condition
1 will be tested at the end of FY24.
The LF shares issued under the Plan have been treated as 'in substance options' which have been valued using
a Modified Binomial Lattice option pricing model which allows for varying exercise price. The resulting value is
amortised over the vesting period on a probability adjusted basis. The probability is assessed with consideration of
management's expectation of future earnings and the financial hurdles for vesting.
Voting and comments made at the company's 2022 AGM
At the 2022 Annual General Meeting (AGM) held on 25 November 2022, 90.19% of the votes received supported
the adoption of the remuneration report for the year ended 3 July 2022. The Company did not receive any specific
feedback at the AGM regarding its remuneration practices. Notwithstanding the shareholder support of the Group’s
remuneration practices demonstrated at the AGM, the non-executive chairman and non-executive directors agreed
to a reduction in fees during FY23 and the KMP’s agreed to forgo all entitlement to the grant of FY23 LTIPS.
periods.
2022
Cash
salary &
fees
Total
short-term
Post-
employment
Superannuation
$
$
$
Other
leave
benefits
(A)
$
Share-
based
payments
(B)
$
Total Proportion of
performance
related
remuneration
%
$
Non-executive directors
Michael Kay
Megan Quinn
Natalie McLean (appointed 5 August 2021)
Neil Thompson (appointed 5 August 2021)
Michael Hardwick (resigned 17 November 2021)
240,000
130,000
104,769
122,231
75,385
240,000
130,000
104,769
122,231
75,385
22,861
13,000
10,477
12,223
7,538
-
-
-
-
-
-
-
-
-
-
262,861
143,000
115,246
134,454
82,923
0%
0%
0%
0%
0%
Executive directors
Phil Ryan
Other key management personnel
Peter McClelland (appointed 10 November 2021)
Munraj Dhaliwal (resigned 10 December 2021)*
866,865
866,865
27,500 120,367
237,199
1,251,931
29%
314,044
263,304
314,044
263,304
19,211
11,784
31,928
-
-
(394,832)
365,183
(119,744)
0%
N/A
2,116,598
2,116,598
124,594 152,295
(157,633) 2,235,854
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 43
Annual Financial Report 2023 | Directors Report
(A) In accordance with AASB 119 Employee Benefits, accrued annual leave and long service leave is classified as
other long-term employee benefit.
e. Service agreements
(B) The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over
Details of these agreements are as follows:
the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the
award multiplied by probability of vesting. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting period date less amounts already recognised in previous periods.
Phil Ryan
Title:
Chief Executive Officer and Managing Director
* Munraj Dhaliwal resigned 10 December 2021, share-based payment balance ($394,832) represents reversal of
Term of agreement:
None
accrued expenses for future long term incentive plans forfeited upon resignation
Details:
• Notice period of 6 months • Remuneration review at board discretion • Eligible for short-
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
The proportion of remuneration linked to performance and the fixed proportion assuming full STI is received and
that the LTI fully vests are as follows:
Name
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Fixed
Remuneration
At risk - STI
At risk - LTI
Cash bonus paid/
payable
Cash bonus
forfeited
Executive director:
Phil Ryan
Other key management personnel:
Peter McClelland
Munraj Dhaliwal
148%*
71%
46%*
12%
(94%)*
17%
0
N/A
324,167
180,000
76%
N/A
70%
83%
24%
N/A
30%
17%
0%
N/A
0%
0%
0
N/A
0
0
180,833
N/A
157,000
55,000
* Negative LTI represents reversal of LTIP accruals from prior periods and leads to fixed remuneration greater than 100%.
term incentives • Eligible for long-term incentives • No severance period • No termination
benefits (except for statutory entitlements) • No other benefits
Peter McClelland
Title:
Chief Financial Officer
Term of agreement:
None
Details:
• Notice period of 6 months • Remuneration review period every 12 months • Eligible
for short-term incentives • Eligible for long-term incentives • No severance period • No
termination benefits (except for statutory entitlements) • No other benefits
All non-executive directors stand for re-election at least every 3 years and have no notice period, no right to
an annual remuneration review, no eligibility for short-term incentives, no eligibility for long-term incentives, no
severance period, no termination benefits and no other benefits.
** Munraj Dhaliwal (resigned 10 December 2021) had ordinary share holdings of 158,005 at date of resignation.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
f. Disclosures relating to share options and performance rights
ISSUE OF SHARE OPTIONS AND PERFORMANCE RIGHTS
There were no options issued to key management personnel as part of compensation during the period ended 2
July 2023 (FY22: nil).
There were 490,419 performance rights issued to key management personnel and subsequently 490,419
performance rights forfeited to key management personnel as part of compensation during the period ended 2
July 2023 (FY22: nil).
There were no loan funded shares issued to key management personnel as part of compensation during the period
ended 2 July 2023 (FY22: nil).
The number of performance rights over ordinary shares and loan funded shares held by key management personnel
as at 2 July 2023 are shown below:
Tranche
Phil Ryan
Peter McClelland
Munraj Dhaliwal
Total
Performance rights
Loan funded shares
2C
1,200,000
-
-
1,200,000
3
2,161,235
-
-
2,161,235
As the Group EPS for the year ended 2 July 2023 finished below the minimum performance threshold, all Tranche
2C performance rights have been valued at nil at 2 July 2023. The rights themselves will only lapse in August 2023.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 45
Annual Financial Report 2023 | Directors Report
ADDITIONAL INFORMATION
LOAN FUNDED SHAREHOLDING
The following earnings information reflects the basis for which financial hurdles are considered for the share-based
The number of loan funded shares in the Company held during the financial period by each director and other
payments and measure executive performance in delivering long term growth of the Group:
members of key management personnel of the consolidated entity, including their personally related parties, is set
(Loss) / Profit before
operations
income
tax
for underlying
($67.9m)
$39.5m
$35.6m
$20.1m
$21.3m
2023
2022
2021
2020
2019
(Loss) / Profit before
operations (before share-based payments)
income
tax
for underlying
($69.0m)
$35.8m
$38.8m
$22.9m
$22.4m
EPS (underlying before income tax and share-based
payments) - Tranche 2C
(29.8) cents
15.5 cents
17.3 cents
11.9 cents
11.6 cents
Profit after income tax for underlying operations
N/A
$29.0m
$24.9m
$13.8m
$15.7m
ADEPS (underlying after income tax) - Tranche 3
N/A
12.5 cents
11.1 cents
7.2 cents
8.2 cents
Note (Loss) / Profit before income tax for underlying operations is presented on a pre AASB 16 basis, consistent with the financial
hurdles.
As noted above, Tranche 4 FY23 LTIPS were cancelled or not issued following an election by participants to forego
grants based on Group performance.
g. Additional disclosures relating to key management personnel
SHAREHOLDING
The number of shares in the Company held during the financial period by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at the
start of the
period
Received
as part of
renumeration
Net Movement
Balance at the
end of
the period
337,576
800,000
21,000
-
10,900
10,284
1,179,760
-
-
-
-
-
-
-
41,380
200,000
79,000
-
-
-
378,956
1,000,000
100,000
-
10,900
10,284
320,380
1,500,140
Directors
Phil Ryan
Michael Kay
Neil Thompson
Megan Quinn
Natalie McLean
Other key management personnel
Peter McClelland
Total
PERFORMANCE RIGHTS HOLDING
The number of performance rights over ordinary shares in the Company held during the financial period by each
director and other members of key management personnel of the consolidated entity, including their personally
related parties, is set out below:
Phil Ryan
Total
Balance at the
start of the
period
Granted
Vested
Expired/
forfeited
Balance at
the end of the
period
1,200,000
1,200,000
490,419
490,419
-
-
-490,419
-490,419
1,200,000
1,200,000
out below:
Phil Ryan
Total
Balance at the
start of the
period
2,161,235
2,161,235
Granted
Vested
Expired/
forfeited
Balance at
the end of the
period
-
-
-
-
-
-
2,161,235
2,161,235
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
The following transactions occurred with key management personnel and their personally related parties:
Consolidated
2023
$
2022
$
Payment for other expenses:
Services provided by Southern Cross Shopfitting, a company that is associated with the Cotton
on Group, of which Natalie McLean is Director and Chief Retail Officer2
578,709
1,642,070
Services provided by International Southern Cross Shopfitting (NZ), a company that is
associated with the Cotton On Group, of which Natalie McLean is Director and Chief Retail
Officer3
18,834
9,790
Total related party transactions
597,543
1,651,860
All transactions were made on normal commercial terms and conditions and at market rates.
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton
Group, of which Natalie McLean is Director and Chief Retail Officer4
11,706
6,557
Trade payables to International Southern Cross Shopfitting (NZ), a company that is associated
with the Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer5
-
534
Consolidated
2023
$
2022
$
This concludes the remuneration report, which has been audited.
2 Natalie McLean was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group.
3 Natalie McLean was not involved in the decision making relating to International Southern Cross Shopfitting (NZ) and its dealings with the Group.
4 Natalie McLean was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group.
5 Natalie McLean was not involved in the decision making relating to International Southern Cross Shopfitting (NZ) and its dealings with the Group.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 47
Annual Financial Report 2023 | Directors Report Shares under option
Non-audit services
There were no unissued ordinary shares of City Chic Collective Limited under options outstanding at the date of
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial period by
this report.
the auditor (EY) are outlined in Note 28 to the financial statements.
Shares under performance rights
There were no unissued ordinary shares of City Chic Collective Limited under performance rights outstanding at the
date of this report, other than those disclosed in the remuneration report.
Shares issued on the exercise of options
There were no ordinary shares of City Chic Collective Limited issued on the exercise of options during the period
ended 2 July 2023 and up to the date of this report.
Shares issued on the exercise of performance rights
During the financial period no ordinary shares of City Chic Collective Limited were issued upon the vesting of
performance rights.
Indemnity and insurance of officers
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity
as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial period, the Company paid a premium in respect of a contract to insure the directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young Australia during or since the financial year.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
The directors are satisfied that the provision of non-audit services during the financial period, by the auditor (or
by another person or firm on the auditor's behalf), is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
Officers of the company who are former partners of Ernst & Young
There are no officers of the Company who are former partners of Ernst & Young.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
MICHAEL KAY
Chairman
30 August 2023
Sydney
PHIL RYAN
Chief Executive Officer and Managing Director
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 49
Annual Financial Report 2023 | Directors Report
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Ernst & Young
200 George Street
Sydney NSW 2000 Aust ralia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Audit or’s independence declarat ion t o t he direct ors of Cit y Chic Collect ive
Limit ed
As lead auditor for the audit of the financial report of City Chic Collective Limited for the financial year
ended 2 July 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of City Chic Collective Limited and the entities it controlled during the
financial year.
Ernst & Young
Yvonne Barnikel
Partner
30 August 2023
Independent audit or’s r epor t t o t he members of Cit y Chic Collect ive Limit ed
Report on t he audit of t he financial report
Opinion
We have audited the financial report of City Chic Collective Limited (t he Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 2 July
2023, the consolidated statement of comprehensive income, consolidated statement of changes in
equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 2 July 2023
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis f or opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (t he Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other et hical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit mat t ers
Key audit matters are those matters that , in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
28
29
51
Invent ory valuat ion
Why significant
At 2 July 2023 the Group’s consolidated statement of
financial position includes inventories with a carrying
value of $53.8m (excluding those classified as held
for sale), representing 23% of total assets.
Inventory is held at geographically diverse locations
at various third-party distribution centres and retail
stores.
As detailed in Note 10 of the financial report,
inventories are valued at the lower of cost and net
realisable value. There is judgment involved in
determining the cost of inventories and in assessing
net realisable value.
The cost of inventories includes elements relating to
the cost of freight, customs duties, foreign exchange
rates and certain warehousing charges. Judgements
were involved in the process of allocating these costs
to inventories.
There is judgement exercised in estimating the value
of inventor y which may be sold below cost and
determining the net realisable value of this inventor y.
Such judgements include the expectations of future
sales price, future sales volumes and inventory
clearance plans, including the cost to dispose of any
excess inventory.
Inventory valuation was a key audit matter due to the
value of the inventory balance relative to total assets
and the various judgements required in determining
its valuation.
How our audit addr essed t he key audit mat t er
Our audit procedures included the following:
► Assessed whether the Group’s inventory
costing methodologies, specifically in
relation to freight, customs duties and
warehousing char ges, were consistent with
Australian Accounting Standar ds.
► Assessed the effectiveness of relevant
controls in relation to the inventory costing
process and assessed the accuracy of the
Group’s inventory valuation methodology, on
a sample basis, including the calculation of
foreign exchange translation.
► Assessed the basis by which the Group
determined that inventory was recor ded at
the lower of cost and net realisable value,
including the rationale for recor ding specific
adjustments to value inventory below cost,
where required.
► Examined sales margins achieved, the
Group’s process for identifying specific slow-
moving inventories, historical inventory
turnover and expected future sales and
assessed the appropriateness of any
adjustments to the value of inventory below
cost as determined by the Group.
Impairment assessment of indefinit e life int angible asset s
Why significant
How our audit addr essed t he key audit mat t er
At 2 July 2023 the Group’s consolidated statement of
financial position includes brand intangible assets and
goodwill with a total carrying value of $61.1m
(excluding those classified as held for sale),
representing 26% of total assets.
As disclosed in Note 13 of the financial report, the
assessment of the impairment of the Group’s
indefinite life intangible assets incorporated
significant judgments and estimates, based upon
conditions existing at 2 July 2023, specifically
concerning factors such as forecast revenues,
forecast costs, discount rates, terminal growth rates
and the application of tax amortisation benefits.
The judgments and assumptions relate to the
sustainability of future performance, mar ket and
economic conditions. The significant assumptions
used in the impairment testing referred to above are
inherently subjective.
The disclosures in the financial report provide
impor tant information about the assumptions made in
the impairment testing and the market conditions at 2
July 2023.
Accordingly, we considered the impairment testing of
indefinite life intangible assets and the related
disclosures in the financial report to be a key audit
matter.
Our audit procedures included the following:
► Assessed the Group’s determination of the
cash generating unit (CGU) used in the
impairment model, based on our
understanding of the nature of the Group’s
business and the economic environment in
which it operates. We also considered
internal reporting of the Group’s results to
assess how earnings and indefinite life
intangible assets are monitored and
reported.
► Assessed whether the Group’s impairment
assessment process was in accor dance with
Australian Accounting Standar ds.
► Assessed the revenue and gross margin
forecasts used by the Group, as outlined in
Note 13 of the financial repor t, by
considering the reliability of the Group’s
historical forecasts, our knowledge of the
business and corroborating assumptions with
external information, where possible.
► Evaluated the appropriateness of discount
rat es and terminal growth rates applied in
the impairment model with involvement from
our valuation specialists.
► Considered whether the application of tax
amortisation benefits were in accordance
with the deductibility rules of intangible
assets held in various jurisdictions with
involvement from our taxation specialists.
► Tested the mathematical accuracy of the
impairment testing models and assessed
whether the models were consistent with the
latest Board approved forecasts.
► Performed sensitivity analysis on key
assumptions including revenue and cost
forecasts in the impairment model.
► Assessed the adequacy of the financial
report disclosures contained in Note 13.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
30
31
53
Asset s Held for Sale
Why significant
During the year, a decision was made by the Group to
sell its operations in the UK and Europe. At 2 July
2023, the Group classified $12.6m as assets held for
sale, net of liabilities associated with the operations.
This balance mainly comprises inventory, brand
intangible and goodwill and was measured at the
lower of carrying amount and fair value less costs to
sell. The sale of assets associated with the UK
operations was completed subsequent to year end.
An impairment loss of $29.4m was recorded.
Comparative figures were adjusted for this
discontinued operation in the consolidated statement
of comprehensive income.
The Group exercised judgement in estimating the
appropriate allocation of goodwill to the held for sale
group and measuring the impairment loss associated
with the net assets classified as held for sale and in
the allocation of results between the discontinued and
continuing operations.
Accordingly, we considered the classification and
impairment of assets held for sale and the related
disclosures in the financial report to be a key audit
matter.
Information about the assets held for sale are
disclosed in Note 4 of the financial report.
How our audit addr essed t he key audit mat t er
Our audit procedures included the following:
► Assessed whether the assets met the
requirements for classification as a
discontinued operation and presentation as
held for sale, including initiation of the sales
process as at balance date, management’s
commitment to sell and the likelihood of the
sale completing within 12 months of balance
date.
► Examined the underlying documentation
including the sale and purchase agreement
for the contractual terms associated with the
UK sale, which defines the assets to be
divested including any liabilities or
obligations retained or created.
► Agreed the carrying amounts of the assets
held for sale to underlying accounting
recor ds and assessed the Group’s allocation
of goodwill to the assets held for sale group.
► Considered the fair value assessment made
by the Group, including comparing the key
assumptions adopted in determining fair
value against available market data and the
signed sale agreement.
► Examined the restatement of the current and
comparative figures in the consolidated
statement of comprehensive income for the
discontinued operations.
► Evaluated the associated financial report
disclosures.
Informat ion ot her t han t he financial report and audit or’s report t hereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report other than the financial report and our
auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual
report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection wit h our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilit ies of t he direct ors for t he financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal cont rol as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Audit or’s responsibilit ies for t he audit of t he financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance wit h the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
► Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to t he audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
32
33
55
► Evaluate the overall presentation, st ructure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit . We remain solely
responsible for our audit opinion.
We communicate wit h the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on t he audit of t he Remunerat ion Report
Opinion on t he Remunerat ion Report
We have audited the Remuneration Report included in pages 13 to 25 of the directors’ report for the
year ended 2 July 2023.
In our opinion, the Remuneration Report of City Chic Collective Limited for the year ended 2 July
2023, complies wit h section 300A of the Corporations Act 2001.
Responsibilit ies
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance wit h section 300A of the Corporations Act 2001. Our
responsibilit y is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Yvonne Barnikel
Partner
Sydney
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislat ion
34
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
CCoonnttiinnuuiinngg ooppeerraattiioonnss
RReevveennuuee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Interest and other revenue
EExxppeennsseess ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Purchase and inbound-related costs of inventory
Fulfilment costs
Cost of sales
Selling, general, and administrative expenses
Employee benefits expense
Depreciation, amortisation and impairment expense
Rental-related recoveries, concessions and expenses
Other expenses
Finance costs
NNoottee
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
5
5
6
6
6
6
6,14
6
268,436
324,145
767
509
(160,131)
(56,674)
(216,805)
(132,727)
(53,210)
(185,937)
(43,871)
(16,248)
(2,919)
(34,351)
(3,751)
(41,873)
(14,514)
(3,697)
(42,595)
(1,583)
((LLoossss)) // PPrrooffiitt bbeeffoorree iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
(48,742)
34,455
Income tax benefit / (expense)
((LLoossss)) // PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
(Loss) after income tax from discontinued operations
7
4
3,704
(10,070)
(45,038)
24,385
(54,740)
(2,108)
((LLoossss)) // PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo
tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
24
(99,778)
22,277
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee
Items that may be reclassified subsequently to profit or loss
Foreign currency translation continuing operations
Foreign currency translation discontinued operations
Other comprehensive income for the period, net of tax
TToottaall ccoommpprreehheennssiivvee ((lloossss)) // iinnccoommee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo tthhee
oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Total comprehensive (loss) / income for the period is attributable to:
Continuing operations
Discontinued operations
843
2,207
7,388
(1,807)
3,050
5,581
(96,728)
27,858
(44,195)
(52,533)
31,773
(3,915)
(96,728)
27,858
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
35
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 57
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss
aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy
CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
NNootteess
CCeennttss
CCeennttss
24
24
24
24
24
24
(19.4)
(19.4)
10.5
10.4
(23.6)
(23.6)
(0.9)
(0.9)
(43.0)
(43.0)
9.6
9.5
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
CCoonnttiinnuuiinngg ooppeerraattiioonnss
RReevveennuuee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Interest and other revenue
EExxppeennsseess ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Purchase and inbound-related costs of inventory
Fulfilment costs
Cost of sales
Selling, general, and administrative expenses
Employee benefits expense
Depreciation, amortisation and impairment expense
Rental-related recoveries, concessions and expenses
Other expenses
Finance costs
NNoottee
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
5
5
6
6
6
6
6,14
6
268,436
324,145
767
509
(160,131)
(56,674)
(216,805)
(132,727)
(53,210)
(185,937)
(43,871)
(16,248)
(2,919)
(34,351)
(3,751)
(41,873)
(14,514)
(3,697)
(42,595)
(1,583)
((LLoossss)) // PPrrooffiitt bbeeffoorree iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
(48,742)
34,455
Income tax benefit / (expense)
((LLoossss)) // PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
(Loss) after income tax from discontinued operations
7
4
3,704
(10,070)
(45,038)
24,385
(54,740)
(2,108)
((LLoossss)) // PPrrooffiitt aafftteerr iinnccoommee ttaaxx eexxppeennssee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo
tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
24
(99,778)
22,277
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee
Items that may be reclassified subsequently to profit or loss
Foreign currency translation continuing operations
Foreign currency translation discontinued operations
Other comprehensive income for the period, net of tax
TToottaall ccoommpprreehheennssiivvee ((lloossss)) // iinnccoommee ffoorr tthhee ppeerriioodd aattttrriibbuuttaabbllee ttoo tthhee
oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Total comprehensive (loss) / income for the period is attributable to:
Continuing operations
Discontinued operations
843
2,207
7,388
(1,807)
3,050
5,581
(96,728)
27,858
(44,195)
(52,533)
31,773
(3,915)
(96,728)
27,858
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
36
35
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 59
Annual Financial Report 2023 | Annual Financial Statements CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss aanndd ootthheerr ccoommpprreehheennssiivvee iinnccoommee
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ffiinnaanncciiaall ppoossiittiioonn
AAss aatt 22 JJuullyy 22002233
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss
aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
EEaarrnniinnggss ppeerr sshhaarree ffoorr ((lloossss)) // pprrooffiitt aattttrriibbuuttaabbllee ttoo tthhee oowwnneerrss ooff CCiittyy
CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
Basic earnings per share
Diluted earnings per share
NNootteess
CCeennttss
CCeennttss
24
24
24
24
24
24
(19.4)
(19.4)
10.5
10.4
(23.6)
(23.6)
(0.9)
(0.9)
(43.0)
(43.0)
9.6
9.5
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
AAsssseettss
CCuurrrreenntt aasssseettss
Cash and cash equivalents
Trade and other receivables
Inventories
Net income tax receivable
Other
Assets held for sale
TToottaall ccuurrrreenntt aasssseettss
NNoonn--ccuurrrreenntt aasssseettss
Plant and equipment
Trade and other receivables
Right-of-use assets
Intangibles
Deferred tax
TToottaall nnoonn--ccuurrrreenntt aasssseettss
TToottaall aasssseettss
LLiiaabbiilliittiieess
CCuurrrreenntt lliiaabbiilliittiieess
Trade and other payables
Lease liabilities
Income tax
Borrowings (restated)
Provisions
Other
Liabilities directly associated with assets held for sale
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
NNoonn--ccuurrrreenntt lliiaabbiilliittiieess
Lease liabilities
Provisions
Other
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett aasssseettss
EEqquuiittyy
Issued capital
Reserves
Reserves directly associated with assets held for sale
(Accumulated losses) / Retained profits
TToottaall eeqquuiittyy
NNoottee
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
8
9
10
7
11
4
12
9
14
13
7
15
14
7
16
17
18
4
14
17
18
21
22
22
23
12,414
7,583
53,798
2,632
4,113
13,203
93,743
13,341
90
56,998
64,488
9,015
143,932
9,953
11,011
195,936
-
4,845
-
221,745
15,355
-
26,255
84,666
7,330
133,606
237,675
355,351
50,996
12,429
-
1,500
6,861
3,917
646
76,349
47,535
931
137
48,603
80,325
9,090
3,284
14,000
8,788
4,304
-
119,791
24,176
422
385
24,983
124,952
144,774
112,723
210,577
182,167
(29,258)
2,207
(42,393)
182,167
(28,975)
-
57,385
112,723
210,577
36
37
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 61
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff cchhaannggeess iinn eeqquuiittyy
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoonnssoolliiddaatteedd ssttaatteemmeenntt ooff ccaasshh fflloowwss
FFoorr tthhee ppeerriioodd eennddeedd 22 JJuullyy 22002233
CCoonnssoolliiddaatteedd
SShhaarree--
bbaasseedd
ppaayymmeennttss
$$''000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$''000000
IIssssuueedd
ccaappiittaall
$$''000000
((AAccccuummuullaatteedd
lloosssseess)) //
RReettaaiinneedd
pprrooffiittss
$$''000000
TToottaall eeqquuiittyy
$$''000000
LLoossss rreesseerrvvee
$$''000000
Balance at 28 June 2021
182,000
(16,490)
(6,725)
(10,991)
35,108
182,902
Profit after income tax expense for the period
Other comprehensive income for the period,
net of tax
Total comprehensive income for the period
Transactions with owners in their capacity as
owners:
Share-based payments (Note 20)
Performance rights over ordinary shares (Note
20)
Loan funded shares held in trust (Note 20)
Refund of loan funded shares held in trust
-
-
-
-
-
-
-
(183)
3,477
(3,310)
-
(3,477)
-
3,310
-
-
22,277
22,277
5,581
- -
5,581
5,581
-
-
-
-
-
-
-
-
-
22,277
27,858
-
-
-
-
(183)
-
(3,310)
3,310
BBaallaannccee aatt 33 JJuullyy 22002222
182,167
(16,840)
(1,144)
(10,991)
57,385
210,577
CCoonnssoolliiddaatteedd
IIssssuueedd
ccaappiittaall
$$ 000000
SShhaarree--
bbaasseedd
ppaayymmeennttss
$$ 000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$ 000000
((AAccccuummuullaatteedd
lloosssseess)) //
RReettaaiinneedd
pprrooffiittss
$$ 000000
LLoossss rreesseerrvvee
$$ 000000
TToottaall eeqquuiittyy
$$ 000000
Balance at 4 July 2022
182,167
(16,840)
(1,144)
(10,991)
57,385
210,577
(Loss) after income tax expense for the period
Total comprehensive income for the period
continued operations
Total comprehensive income for the period
discontinued operations
Transactions with owners in their capacity as
owners:
Share-based payments (Note 20)
Share issue expenses (net of tax)
Performance rights over ordinary shares (Note
20)
Loan funded shares held in trust (Note 20)
Refund of loan funded shares held in trust
-
-
-
-
-
-
-
-
-
-
-
(1,126)
-
-
-
-
-
-
(99,778)
(99,778)
843
-
(99,778)
(98,935)
2,207
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,207
(1,126)
-
-
-
- -
- -
BBaallaannccee aatt 22 JJuullyy 22002233
182,167
(17,966)
1,906
(10,991)
(42,393)
112,723
Note reference
21
22
22
22
23
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
NNoottee
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
CCaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess
Receipts from customers (inclusive of GST, VAT and sales tax)
Payments to suppliers and employees (inclusive of GST, VAT and sales tax)
Government grants received
Interest received
Other revenue
Interest and other finance costs paid
Income taxes paid
344,463
(310,660)
7
86
681
(1,888)
(2,924)
401,804
(443,809)
21
34
452
(1,583)
(8,813)
NNeett ccaasshh ffrroomm//((uusseedd iinn)) ooppeerraattiinngg aaccttiivviittiieess
19
29,765
(51,894)
CCaasshh fflloowwss ffrroomm iinnvveessttiinngg aaccttiivviittiieess
Payments for plant and equipment
Payments for intangibles
Payment for purchase of business (net of cash acquired)
12
13
33
(2,280)
(1,595)
-
(9,077)
(2,468)
(4,254)
NNeett ccaasshh uusseedd iinn iinnvveessttiinngg aaccttiivviittiieess
(3,875)
(15,799)
CCaasshh fflloowwss ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
Net proceeds from the issue of shares
Repayment of lease liabilities
Proceeds from borrowings
Repayment of borrowings
21
14
16
16
-
(11,247)
26,500
(39,000)
-
(8,040)
14,000
-
NNeett ccaasshh ((uusseedd iinn))//ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
(23,747)
5,960
NNeett ((ddeeccrreeaassee))//iinnccrreeaassee iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss ffrroomm ooppeerraattiioonnss
Cash and cash equivalents at the beginning of the financial period
Effects of exchange rate changes on cash and cash equivalents
2,143
9,953
318
(61,733)
71,457
229
((55,,883355))
28,929
120
Cash and cash equivalents at the end of the financial period
8
12,414
9,953
23,214
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
38
39
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 63
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
GGeenneerraall iinnffoorrmmaattiioonn
22 JJuullyy 22002233
The financial statements cover City Chic Collective Limited as a consolidated entity consisting of City Chic
Collective Limited and the entities it controlled at the end of, or during, the period. The financial statements are
presented in Australian dollars, which is City Chic Collective Limited s functional and presentation currency.
City Chic Collective Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
151-163 Wyndham Street
Alexandria, NSW 2015
Sydney, Australia
Telephone: (+61) 2 9059 4300
A description of the nature of the consolidated entity s operations and its principal activities are included in the
directors report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 August
2023. The directors have the power to amend and reissue the financial statements.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess
BBaassiiss ooff pprreeppaarraattiioonn
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board ( AASB ) and the
Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply
with International Financial Reporting Standards as issued by the International Accounting Standards Board
( IASB ).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the valuation of financial assets and liabilities at fair value through profit or loss and financial assets at fair value
through other comprehensive income.
FFiinnaanncciiaall rreeppoorrttiinngg ppeerriioodd
The Company reports within a retail financial period. The current financial year represents a 52-week period
ended 2 July 2023 (2022: 53 week period ended 3 July 2022). This treatment is consistent with s323D
Corporations Act 2001.
CCrriittiiccaall aaccccoouunnttiinngg eessttiimmaatteess aanndd jjuuddggeemmeennttss
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity s accounting
policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements, are disclosed in Note 2. Critical accounting judgements,
estimates and assumptions.
OOffffsseettttiinngg ffiinnaanncciiaall aasssseettss aanndd lliiaabbiilliittiieess
Financial assets and financial liabilities have been offset and the net amount presented in the statement of
financial position where the consolidated entity currently has a legally enforceable right to set off the recognised
amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in Note 32. Parent entity disclosures.
PPrriinncciipplleess ooff ccoonnssoolliiddaattiioonn
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of City Chic
Collective Limited ( Company or parent entity ) as at 2 July 2023 and the results of all subsidiaries for the
period then ended. City Chic Collective Limited and its subsidiaries together are referred to in these financial
statements as the consolidated entity .
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities
of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated
entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
40
41
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 65
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities, and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair
value of any investment retained together with any gain or loss in profit or loss.
FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn
The financial statements are presented in Australian dollars, which is City Chic Collective Limited s functional
and presentation currency.
Foreign currency transactions and balances
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at financial period-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss.
currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in profit or loss with the
foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the
cumulative amount is reclassified to profit or loss. Tax charges and credits attributable to exchange
differences on those monetary items are also recognised in OCI.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at
the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using
the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All
resulting foreign exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
CCuurrrreenntt aanndd nnoonn--ccuurrrreenntt ccllaassssiiffiiccaattiioonn
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the consolidated entity s normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other
assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity s normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
FFiinnaanncciiaall aasssseettss
Financial assets are initially measured at fair value. Financial assets and financial liabilities are recognised in the
instrument. Transaction costs are included as part of the initial measurement, except for financial assets at fair
value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value
depending on their classification. Classification is determined based on both the business model within which
such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting
mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred
and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is
no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held
within a business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the
contractual terms of the financial asset represent contractual cash flows that are solely payments of principal
and interest. The amortised cost of a financial asset is the amount at which the financial asset is measured at
initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest
method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any
loss allowance.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the consolidated entity s assessment at the end of each reporting period as to
whether the financial instrument s credit risk has increased significantly since initial recognition, based on
reasonable and supportable information that is available, without undue cost or effort to obtain. Refer to Note
9. Trade and other receivables for detail.
IImmppaaiirrmmeenntt ooff nnoonn--ffiinnaanncciiaall aasssseettss
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset s fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
FFiinnaannccee ccoossttss
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are
expensed in the period in which they are incurred.
GGooooddss aanndd SSeerrvviicceess TTaaxx (( GGSSTT )) aanndd ootthheerr ssiimmiillaarr ttaaxxeess
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the
statement of financial position.
42
43
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 67
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
RRoouunnddiinngg ooff aammoouunnttss
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to rounding-off . Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest
dollar.
CCoommppaarraattiivvee aammoouunnttss
Where management has considered appropriate to achieve more relevant and reliable presentation of the
entity s financial performance, the presentation of certain items in the financial statements has changed since
the prior year. Where this re-presentation of results requires reclassification of comparative amounts, the
comparatives have been re-presented to achieve more relevant and reliable presentation and comparability.
The principal accounting policies adopted are consistent with those of the previous financial year and
corresponding current reporting period, except for the policies stated below. Refer to Note 16. Borrowings for
specific restatement of prior period disclosure.
GGooiinngg CCoonncceerrnn
The Directors have prepared the financial statements on a going concern basis, which assumes continuity of
normal business activities and the realisation of assets and the discharge of liabilities in the ordinary course of
business.
The Group incurred a loss from continuing operations after income tax for the year ended 2 July 2023 of
$45.0m (3 July 2022 profit of $24.4m). Subsequent to year-end (see Note 36), the group has divested of the
Evans business and EMEA inventory for a total cash consideration of £8m (c. $15.5m AUD). Net of transaction
costs, and
The proceeds from the sale of Evans have been
remaining $1.5m acquisition facility and result in the continued operations being in a significantly stronger
balance sheet position. This is the first step in executing management strategic plan, to determine the most
efficient path to profitable growth.
The Group is in a net current-asset and net asset position and had a positive net operating cashflow in the
current year. It is forecasting to be in the same position going forward. The debt facility is fully available to
fund any timing differences between payments and cash receipts and the forecasted cashflow demonstrates
y fall due, making the going concern assumption
appropriate at the time of signing.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 11.. SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliicciieess ((ccoonnttiinnuueedd))
AAmmeennddmmeennttss ttoo AAccccoouunnttiinngg SSttaannddaarrddss tthhaatt aarree mmaannddaattoorriillyy eeffffeeccttiivvee ffoorr tthhee ccuurrrreenntt rreeppoorrttiinngg ppeerriioodd
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to their operations and effective for the current year.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group during the reporting period ended 2 July 2023.
The new and amended standards and interpretations that are issued and are relevant to the Group, but not yet
effective, for the annual reporting period ended 2 July 2023 are disclosed below. The Group intends to adopt
these new and amended standards and interpretations, if applicable, when they become effective.
SSttaannddaarrddss iinn iissssuuee bbuutt nnoott yyeett eeffffeeccttiivvee
NNeeww oorr rreevviisseedd rreeqquuiirreemmeenntt
AASB 2020-1 Amendments to Australian Accounting Standards
Classification of Liabilities as Current or Non-current and AASB 2020
6 Amendments to Australian Accounting Standards Classification
WWhheenn eeffffeeccttiivvee
Effective for annual reporting periods beginning on or after 1
January 2024
of Liabilities as Current or Non-current Deferral of Effective Date
AASB 2022-5 Amendments to Australian Accounting standards
Lease Liability in a Sale and Leaseback
AASB 2023-1 Amendments to AASs Amendments to AASB 107 and
AASB 7
Disclosures of Supplier Finance Arrangements
AASB 2023-3 Amendments to Australian Accounting Standards
Disclosure of Non-
current Liabilities with Covenants: Tier 2
AASB 2014-10 Amendments to AASs Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
Effective for annual reporting periods beginning on or after 1
January 2024
Effective for annual reporting periods beginning on or after 1
January 2024
Effective for annual reporting periods beginning on or after 1
January 2024
Effective for annual reporting periods beginning on or after 1
January 2025
The Group has not yet assessed the impact of the remaining new or amended Accounting Standards and
Interpretations.
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss
The preparation of the financial statements requires management to make judgements, estimates, judgement
in accounting policy and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue,
and expenses. Management bases its judgements, estimates and assumptions on historical experience and on
other various factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Allowance for impairment of inventories
The allowance for impairment of inventories assessment requires a degree of estimation and judgement. The
level of the provision is assessed by considering the recent sales experience, the ageing of inventories and other
factors such as end of life or terminal inventory, that affect inventory obsolescence. Refer to Note 10. Inventories
for further information.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in Note 13. Intangibles. The recoverable amounts of cash-
generating units have been determined based on value-in-use calculations. These calculations require the use
of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the
estimated future cash flows. The recoverable amount of brands is determined with Goodwill. That is, at a Group
level under one cash generating unit, supported by the single operating segment. Refer to Note 13. Intangibles
for further information.
44
45
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 69
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 22.. CCrriittiiccaall aaccccoouunnttiinngg jjuuddggeemmeennttss,, eessttiimmaatteess aanndd aassssuummppttiioonnss ((ccoonnttiinnuueedd))
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement
is required in determining the provision for income tax. There are many transactions and calculations undertaken
during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated
entity recognises liabilities for anticipated tax audit issues based on the consolidated entity s current
understanding of the tax law. Where the final tax outcome of these matters is different from the carrying
amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences and
losses. Refer Note 7. Income tax for further information
Determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease or the ability of staying on past lease expiry date (in holdover) if it is
reasonably certain to be exercised. The Group applies judgement in evaluating whether it is reasonably certain
whether leases will be extended beyond the contracted period. Refer to Note 14. Right-of-use assets and Lease
liabilities for further information.
Holdover leases
The Group has historically always had several lease contracts in holdover. The Group applies judgement in
evaluating whether it is reasonably certain whether leases will be extended beyond the contracted period. A
range of 2 to 5 years extension is estimated based on average lease terms. Refer to Note 14. Right-of-use assets
and Lease liabilities for further information.
Discontinued operations including tax balances
A discontinued operation is a component of the Group that represents a separate major line of business that
is part of a disposal plan. The results of discontinued operations are presented separately in the Consolidated
statement of profit and loss. The Group has considered the estimates and judgements of impairment of
discontinued operations assets and associated costs that involve a high degree of complexity and have a risk
of causing a material adjustment to the carrying amounts of assets and liabilities within subsequent periods.
Any changes to carrying values in subsequent periods due to revisions or estimates or assumptions or as a
result of the final realization of the discontinued operation assets and liabilities upon exit of the business will
be rec
operations for further information.
Refer Note 4. Discontinued
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 33.. OOppeerraattiinngg sseeggmmeennttss
Identification of reportable operating segments
-channel retailer, focused on the plus-size
market whilst delivering profitability and to leverage a centralised structure that is not specific to a geography
or channel. As such the consolidated entity is organised into one operating segment, being fashion retail.
Despite having numerous brands and geographies, the Chief Executive Officer who is identified as the Chief
Operating Decision Makers ( CODM ) assesses the performance and determines the allocation of resources at a
single segment, consolidated level with each part of the business exhibiting similar long-term financial
performance and economic characteristics.
The CODM assess the performance of the operating segment based on a measure of EBITDA (Earnings before
interest, tax, depreciation, amortisation and impairment, and other adjustments). The accounting policies
adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on at least a monthly basis, including daily and weekly reporting on
key metrics.
Major customers
There is no revenue that is significant from any particular customer. Segment revenue from external parties,
assets and liabilities are all reported to the CODM in a manner consistent with the financial statements.
Revenue by geographical area
The Group continues to operate in the following geographical regions:
• Asia Pacific (APAC) current operations in Australia and New Zealand. Both regions serviced by stores,
website and marketplace
• Americas current operations in United States and Canada. US sales are comprised of online (website
and marketplace) and wholesale; Canadian business is wholesale and online (marketplace only)
Reconciliation of net profit to Underlying EBITDA14
Reconciliation of net profit after income tax from continuing operations to Underlying EBITDA (Earnings
before interest, taxation, depreciation, amortisation, impairment, and other adjustments) from continuing
operations is provided as follows:
Net (Loss) / profit after tax from continuing operations
Interest expense
Tax (benefit) / expense from continuing operations
Depreciation, amortisation and impairment expense
Northern hemisphere warehouse relocation11
Transaction costs12
Other13
UUnnddeerrllyyiinngg EEBBIITTDDAA ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
ppoosstt--AAAASSBB116614
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
(45,038)
3,751
(3,704)
16,248
4,464
308
-
(23,971)
24,385
1,583
10,070
14,514
322
1,972
960
53,806
11 Northern hemisphere warehouse relocation relates to the strategic review for a new facility (FY22) and the closure of the previous
warehouse facility, transport and set up costs of new facility and consulting costs associated with the move (FY23).
12 FY23 Transaction costs related to costs associated with other acquisition opportunities; FY22 Transaction costs related to executing the
acquisition of Navabi and costs associated with other acquisition opportunities.
13 FY22 costs related mainly to the impact of additional on-costs in respect of the vesting of the performance rights over ordinary shares
during the current reporting period and the outstanding performance rights and loan funded shares at the end of the reporting period;
these costs are net of a favourable impact from the forfeiture of performance rights and loan funded shares in FY22. FY22 also includes
transition costs to Integrate Navabi, including restructuring and consulting fees.
14 Reconciliation of net profit after income tax from continuing operations to Underlying EBITDA (Earnings before interest, taxation,
depreciation, amortisation, impairment and other adjustments) is provided (Underlying EBITDA is a non IFRS measure)
46
47
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 71
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 44.. DDiissccoonnttiinnuueedd OOppeerraattiioonnss
SSiiggnniiffiiccaanntt aaccccoouunnttiinngg ppoolliiccyy
The Group classifies current assets as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. Current assets classified as held for sale are
measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax
expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the
asset is available for immediate sale in its present condition. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be
completed within one year from the date of the classification.
Intangible assets are not amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of
financial position.
Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued operations in the statement of profit or loss.
AAsssseettss hheelldd ffoorr ssaallee aanndd ddiissccoonnttiinnuueedd ooppeerraattiioonnss
The Group divested the Evans business and EMEA inventory via an asset sale and purchase agreement
(Agreement). AK Retail Holdings Limited (AK Retail Holdings), has acquired the Evans brand, intellectual
property and customer base under the Agreement that signed and closed on 3 August 2023. The Agreement
Under the Agreement, AK Retail Holdings has paid City Chic a total cash consideration of £8m (c. $15.5m
AUD). Net of transaction costs, and
$12m AUD). City Chic has agreed with its 3PL provider to close its UK warehouse which also supports its
European operations. As a result, the Navabi business has ceased trading. City Chic retains the right to trade
under the City Chic, Avenue and other non-Evans brands in EMEA in the future. There will be a transition
period for AK Retail Holdings to sell all non-Evans branded product and for City Chic to sell its remaining
Evans-branded product in ANZ and North America. The results of the discontinued operation for the year are
presented below:
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 44.. DDiissccoonnttiinnuueedd OOppeerraattiioonnss ((ccoonnttiinnuueedd))
RReessuullttss ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonn
Revenue from discontinued operations
Expense
OOppeerraattiinngg IInnccoommee // ((lloossss))
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
40,254
(66,028)
(25,774)
45,102
(46,822)
(1,720)
Impairment loss recognised on the remeasurement to fair value less costs to sell
(29,402)
-
Income tax benefit / (expense)
LLoossss aafftteerr iinnccoommee ttaaxx ffrroomm ddiissccoonnttiinnuueedd ooppeerraattiioonnss
436
(54,740)
(388)
(2,108)
CCaasshh fflloowwss ffrroomm//((uusseedd iinn)) ddiissccoonnttiinnuueedd ooppeerraattiioonnss
The results of cash flows from/(used in) the discontinued operations during the period are set out below,
including comparative information.
Net cash provided from / (used in) operating activities
Net cash provided from / (used in) investing activities
Net cash provided from / (used in) financing activities
22002233
15,758
(2)
-
22002222
$$ 000000
(73,203)
(20)
-
Net cash inflow / (outflow) from discontinued operations
15,756
(73,223)
AAsssseettss aanndd lliiaabbiilliittiieess ooff ddiissppoossaall ggrroouupp ccllaassssiiffiieedd aass hheelldd ffoorr ssaallee
The following assets and liabilities were reclassified as held for sale in relation to discontinued operations as at
2 July 2023:
Assets classified as held for sale:
Cash and cash equivalents
Brand
Intangible
Other assets
Inventories
Total assets of disposal group held for sale
Liabilities directly associated with assets classified as held for sale:
Trade and other payables
Other liabilities
Provisions
Total liabilities of disposal group held for sale
Net assets
22002233
$$ 000000
144
5,993
282
126
6,658
13,203
249
10
387
646
12,557
The assets classified as held for sale have been assessed against the fair value less cost to sell. This has resulted
in an impairment of $29.4m, as disclosed above in the results from discontinued operation. The assets classified
as held for sale have been presented net of this impairment.
48
49
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 73
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 55.. RReevveennuuee
From continuing operations
Sale of goods
RReevveennuuee ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss
Interest revenue
Other revenue
RReevveennuuee
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Timing of revenue recognition
Goods transferred at a point in time
Geographical regions
APAC
Americas
Channel
Online website
Stores
Online marketplace
Wholesale
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
268,436
268,436
324,145
324,145
86
681
767
34
475
509
269,203
324,654
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
268,436
324,145
141,106
127,330
161,757
162,388
268,436
324,145
183,980
59,926
20,749
3,781
238,072
61,063
20,427
4,583
268,436
324,145
Accounting policy for revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected
to be entitled in exchange for transferring goods to a customer. For each contract with a customer, the
consolidated entity: identifies the contract with a customer; identifies the performance obligations in the
contract; determines the transaction price which takes into account estimates of variable consideration and the
time value of money; allocates the transaction price to the separate performance obligations on the basis of the
relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when
or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods
or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the expected value or most likely amount method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 55.. RReevveennuuee ((ccoonnttiinnuueedd))
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, which is generally at the time of delivery.
Store and online sales
Revenue is recognised at the point of sale, which is where the customer has taken delivery of the goods.
Amounts disclosed as revenue are net of sales returns, trade discounts and commission paid. Return policy on
sale of goods range from 30 to 90 days and provision is made based on historical return percentage, refer to
Note 17. (Provisions) for sales return provision raised and refer to Note 11. (Other assets) for corresponding right-
of-return assets recognised.
Wholesale sales
Revenue is recognised at time of delivery less an allowance for estimated customer returns, rebates, and other
similar allowances.
NNoottee 66.. EExxppeennsseess
Purchase and inbound-related costs of inventory
Fulfilment costs
Depreciation, amortisation, and impairment expense
Rental-related expenses
Employee benefits expense excluding superannuation and share-based payments
Government grants
Defined contribution superannuation expenses
Share-based payments expense
Other expenses
Utility and maintenance expenses
Transactional fees and charges
Marketing expenses
Advertising expenses
Professional, consulting and insurance
FX (gain) / loss
Sundry
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
160,131
56,674
16,248
2,919
41,740
(7)
3,264
(1,126)
279,843
5,309
5,347
6,394
8,633
10,058
(4,082)
2,692
34,351
132,727
53,210
14,514
3,697
38,235
(21)
2,905
754
246,021
4,613
6,781
8,869
10,575
6,866
159
4,732
42,595
TToottaall
314,194
288,616
Accounting policy for purchase and inbound related costs of inventory and fulfillment costs
Purchase and inbound related costs include underlying product cost and
inbound freight, duties and other charges. Fulfilment costs represent warehousing and freight costs to deliver
online sales.
Accounting policy for rent related expenses
Refer to Note 14. Right-of-use assets and Lease liabilities.
Accounting policy for Advertising and Marketing expenses
Advertising Expenses include costs associated with driving customer acquisition and re-engagement, such as
digital advertising and direct mail campaigns. All other marketing costs, such as photoshoots and content
development, are reflected in Marketing Expenses.
50
51
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 75
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 77.. IInnccoommee ttaaxx
a) Income tax expense
Current tax
Deferred tax origination and reversal of temporary differences
Prior year tax over/ (under) provisions
Foreign exchange
Aggregate income tax (benefit)/expense
Income tax (benefit)/expense is attributable to:
(Loss) / Profit from continuing operations
Aggregate income tax (benefit)/expense
b) Numerical reconciliation of income tax expense and tax at the statutory rate
(Loss)/Profit before income tax from continuing operations
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-taxable income
LTIP and LFSP
Unrealised foreign exchange loss (benefit)
Other non-deductible expenses
Difference in overseas tax rates
Prior year deferred tax (under)/over provisions
Prior year current tax over/(under) provisions
Foreign exchange
US state tax payable
Tax loss not recognised/utilised
DTA recognised on prior year tax losses
Income tax (benefit)/expense from continuing operations
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
123
(335)
(3,798)
306
(3,704)
(3,704)
(3,704)
10,159
(191)
(104)
206
10,070
10,070
10,070
(48,742)
34,455
(14,623)
10,337
(172)
(464)
-
1,395
(13,864)
4,120
(1,434)
(2,363)
253
43
9,541
-
(3,704)
-
42
602
886
11,867
(911)
106
(104)
94
171
-
(1,153)
10,070
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 77.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
f) Deferred tax assets
Deferred tax asset/liabilities comprises temporary differences attributable to:
Tax losses
Property, plant and equipment
Employee benefits
Leases
Other provisions and accruals
Inventories
Other
Amounts initially recognised in equity
Deferred tax asset
Movements:
Opening balance
Foreign exchange on opening balance
Prior year under/over
(Charged)/Credited to profit or loss continuing
Credited / (charged) to profit or loss discontinued
(Charged)/Credited to Business Combination and Equity
Closing balance
Income tax (benefit)/expense related to discontinued operations
(436)
388
Receivable / (Provision) for income tax
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
1,790
(3,120)
1,219
2,322
5,949
2,448
(4,914)
1,181
2,222
4,702
676 1,398
(74)
(66)
6,963
8,770
245
367
9,015
7,330
7,330
351
1,434
458
(436)
(122)
9,015
7,808
364
(636)
(506)
388
(88)
7,330
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
2,632
(3,284)
c) Capital losses
Unused tax losses related to capital losses of $147.2m (2022: $147.2m) carried forward for which no deferred
tax asset has been recognised. These tax losses can only be utilised in the future if the continuity of ownership
test is passed, or failing that, the same business test is passed.
d) Income tax losses
As at 2 July 2023, the consolidated entity (including EMEA) had carried forward income tax losses of $91.4m
(2022: $20.7m). The income tax losses carried forward at 3 July 2022 were from its US, UK and EU businesses.
These tax losses can be utilised in the future subject to local tax law requirements such as continuity of
ownership or the same business. A deferred tax asset can be recognised on losses to the extent that it is
probable that sufficient taxable profit will be available to utilise the tax losses in future financial periods. At 2
July 2023, the Group has recognised a deferred tax asset related to tax losses for $1.8m (2022: $2.5m), based
on management recoverability assessment.
e) Tax consolidation legislation
City Chic Collective Limited and its wholly owned Australian controlled entities implemented the tax
consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out below.
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period s taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
52
53
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 77
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 77.. IInnccoommee ttaaxx ((ccoonnttiinnuueedd))
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the
same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
City Chic Collective Limited (the head entity ) and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the
tax consolidated group continue to account for their own current and deferred tax amounts. The tax
consolidated group has applied the separate taxpayer within group approach in determining the appropriate
amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from
each subsidiary in the tax consolidated group.
The amount receivable/payable under the tax funding agreement is due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity
may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as
amounts receivable from or payable to other entities in the tax consolidated group. The tax funding
arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax
consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a
distribution by the subsidiaries to the head entity.
NNoottee 88.. CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss
Current assets
Cash at bank
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
12,414
9,953
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 99.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
TToottaall ttrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Non-Current assets
Other receivables
TToottaall ttrraaddee aanndd ootthheerr rreecceeiivvaabblleess
Past due but not impaired
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
5,312
(241)
2,512
8,252
(306)
3,065
7,583
11,011
90
90
-
-
As at 2 July 2023, trade receivables of $0.3m (2022: $0.7m) were past due but not impaired. These relate to a
number of independent customers for whom there is no recent history of default.
The ageing analysis of these trade receivables is as follows:
30 to 60 days
60 to 90 days
90 days and over
TTrraaddee rreecceeiivvaabblleess ppaasstt dduuee bbuutt nnoott iimmppaaiirreedd
Current
TToottaall ttrraaddee rreecceeiivvaabblleess
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
186
23
132
341
4,971
5,312
460
59
161
680
7,572
8,252
Allowance for expected credit losses
The Group has recognised a gain of $0.1m (2022: loss of $0.1m) in profit of loss in respect of the expected credit
losses for the year ended 2 July 2023. The recoverability of trade and other receivables at 2 July 2023 has been
assessed to consider the impact of the current economic environment and no material recoverability issues
were noted. The Group determines the expected credit losses on these items by using a provision matrix,
estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as
appropriate to reflect current conditions and estimates of future economic conditions.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Current
30 to 60 days
60 to 90 days
90 days and over
AAlllloowwaannccee ffoorr eexxppeecctteedd ccrreeddiitt lloossss
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
90
3
16
132
224411
219
66
-
21
330066
54
55
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 79
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 99.. TTrraaddee aanndd ootthheerr rreecceeiivvaabblleess ((ccoonnttiinnuueedd))
Movement of allowance for expected credit loss
Carrying amount at the start of the period
Additional allowance recognised
Allowance derecognised
Amount used
Carrying amount at the end of the period
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
306
286
(289)
(62)
202
149
-
(45)
241
306
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days. Other receivables are recognised at amortised cost, less any allowance for expected
credit losses.
NNoottee 1100.. IInnvveennttoorriieess
Current assets
Finished goods at cost
Provision for obsolescence
TToottaall iinnvveennttoorriieess
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
70,606
(16,808)
200,882
(4,946)
53,798
195,936
Finished goods have reduced 64.9% from $200.9m at 3 July 2022 to $70.6m at 2 July 2023. This reduction
includes $19.3m (before impairment) of EMEA inventory moved to assets held for sale. The provision for
obsolescence has increased by $11.9m over the same period.
Accounting policy for inventories
Finished goods are stated at the lower of cost and net realisable value. Cost is determined on a weighted
average cost method and includes purchase and delivery costs, net of rebates and discounts received or
receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
fulfilment and the estimated costs necessary to make the sale. The allowances against inventory are recognised
to account for obsolescence, the expected sales below cost and inventory expected to be lost through
shrinkage. In recognising the allowance for inventory, judgement has been applied by considering a range of
factors including historical loss-making sales, historical inventory shrinkage trends, inventory ageing,
seasonality, and product lifecycle.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1111.. OOtthheerr aasssseettss
Current assets
Prepayments
Right of return assets
TToottaall ootthheerr aasssseettss
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
2,356
1,757
4,113
3,248
1,597
4,845
Accounting policy for right of return assets
Right of return assets represents the right to recover inventory sold to customers and is based on an estimate
of customers who may exercise their right to return the goods and claim a refund. Such rights are measured at
the value at which the inventory was previously carried prior to sale, less expected recovery costs and any
impairment.
NNoottee 1122.. PPllaanntt aanndd eeqquuiippmmeenntt
Non-current assets
Plant and equipment at cost
Less: Accumulated depreciation
TToottaall ppllaanntt aanndd eeqquuiippmmeenntt
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
31,798
(18,457)
30,505
(15,150)
13,341
15,355
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions
Depreciation expense
Accelerated depreciation
Exchange differences
BBaallaannccee aatt 33 JJuullyy 22002222
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Accelerated depreciation
Exchange differences
BBaallaannccee aatt 22 JJuullyy 22002233
TToottaall ppllaanntt aanndd
eeqquuiippmmeenntt
$$ 000000
10,191
9,077
(3,921)
(409)
417
15,355
2,280
(1,049)
1,017
(4,228)
(70)
36
13,341
56
57
Accelerated depreciation
During the current and prior reporting periods, the Group closed a number of stores. The carrying value of these
stores was extinguished to nil through accelerated depreciation.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 81
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1122.. PPllaanntt aanndd eeqquuiippmmeenntt ((ccoonnttiinnuueedd))
Accounting policy for property, plant and equipment
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on a
straight-line basis to write off the net cost of each item of plant and equipment (excluding land) over their
expected useful lives, which range from 2 to 10 years.
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each
reporting date.
An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to
profit or loss.
Impairment of assets
Plant and equipment is reviewed for indicators of impairment or changes in circumstances that indicate that
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
value less costs of disposal and value in use.
Management has performed an impairment assessment on all stores at year-end and confirmed that there was
no impairment (2022: nil).
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1133.. IInnttaannggiibblleess
Non-current assets
Goodwill at cost
Brand assets at cost
Customer relationships at cost
Less: Customer relationships accumulated amortisation
Other intangible assets at cost
Less: Other intangible assets accumulated amortisation
TToottaall iinnttaannggiibblleess
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
48,178
12,907
52,153
28,116
3,644
3,871
(2,606) (2,145)
1,726
1,038
10,323
(7,958)
2,365
9,071
(6,400)
2,671
64,488
84,666
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions through business combinations (Note 33)
Additions
Amortisation expense
Exchange differences
BBaallaannccee aatt 33 JJuullyy 22002222
Transfer to assets held for sale
Additions
Amortisation expense
Exchange differences
GGooooddwwiillll
$$ 000000
BBrraanndd aasssseettss
$$ 000000
CCuussttoommeerr
rreellaattiioonnsshhiippss
$$ 000000
OOtthheerr
iinnttaannggiibblleess
$$ 000000
TToottaall
$$ 000000
45,199
6,942
-
-
12
52,153
(6,046)
-
-
2,071
26,001
1,347
-
-
768
28,116
(16,423)
-
-
1,214
11,,777766
164
936
(1,147)
(3)
1,726
(314)
-
(461)
87
1,038
2,626
-
1,532
(1,564)
77
2,671
(356)
1,595
(1,558)
13
75,602
8,453
2,468
(2,711)
854
84,666
(23,139)
1,595
(2,019)
3,385
2,365
64,488
BBaallaannccee aatt 22 JJuullyy 22002233
48,178
12,907
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their
fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost.
Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment.
Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains
or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the
difference between net disposal proceeds and the carrying amount of the intangible asset. The method and
useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption
or useful life are accounted for prospectively by changing the amortisation method or period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually
for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired and
is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss
and are not subsequently reversed.
58
59
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 83
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1133.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
Brand assets
Brand assets are recognised on the acquisition date. Brand assets have been determined to be indefinite life
intangibles and are not amortised. Brand is tested annually for impairment, or more frequently if events or
changes in circumstances indicate that it might be impaired and is carried at cost less accumulated impairment
losses. Impairment losses on brand are taken to profit or loss.
Customer relationships
Acquired customer relationships are carried at original cost based on independent valuation obtained at the
date of acquisition less accumulated amortisation. They are amortised on a straight-line basis over a useful life
of 3 years. The estimated useful life and amortisation period is reviewed at the end of each annual reporting
period.
Other intangible assets
Significant costs associated with the development of the revenue generating aspects of websites development
and enhancements, including the capacity of placing orders, are deferred and amortised on a straight-line basis
over the period of their expected benefit, being their finite life of 4 years.
Significant costs associated with software are deferred and amortised on a diminishing value basis over the
period of their expected benefit, being their finite life of 2-4 years.
Configuration and customisation costs incurred in implementing
are recognised in profit or loss as the customisation and configuration services are performed, or, in certain
circumstances, over the SaaS contract term when access to the cloud application software is provided.
SaaS arrangements
Transfer to assets held for sale
As set out in Note 4, the Group has classified specific assets as held for sale at 2 July 2023 related to the
divestment of the EMEA business. From intangibles this relates to the Evans and Navabi brands, customer lists
and other intangibles. Because the CGU for goodwill is assessed at a consolidated Group level, only a portion
of goodwill can be allocated to the assets held for sale from the Group goodwill balance. The allocation is
based on the relative value of the EMEA business as a proportion of the group and has been assessed at
$6.0m.
Impairment
Intangible assets with a finite life are reviewed for impairment when events or changes in circumstances indicate
that the carrying amount may not be recoverable. Intangible assets that have an indefinite useful life, including
goodwill, are not subject to amortisation and are tested annually for impairment irrespective of whether there
amount exceeds its recoverable amount. The recove
of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash generating units.
Goodwill and Brand impairment assessment
Determining whether goodwill or brand is impaired requires an estimation of the value-in-use of the cash-
generating units (CGUs) to which the intangible has been allocated. These calculations reflect an estimated
cash flow projection based on a five-year forecast and requires the use of assumptions, including estimated
discount rates; growth rates of estimated future cash flows; and terminal growth rates. The CGU for goodwill
and brand is assessed at a consolidated Group level, in line with the one operating segment used in its
reporting.
The discounted cash flow valuations were calculated using projected five-year future cash flows based on Board
approved business plans. Business plans are modelled assuming like for like sales growth based on historical
performance considering changing market conditions.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1133.. IInnttaannggiibblleess ((ccoonnttiinnuueedd))
The key assumptions used by management in setting the financial budgets for the initial five-year period were
as follows:
Forecast sales growth rates
(i)
Forecast sales growth rates are based on past experience adjusted for economic conditions and the strategic
decisions made in respect of the CGU.
(ii) Gross margin rates
Gross margin rates against sales are estimated based on sales channel and region mix and adjusted for
economic conditions and the strategic decisions made in respect of the CGU.
(iii) Fulfilment costs
Fulfilment costs assumptions are based on long-term 3PL agreements in each region and market freight rates.
(iv) Operating profits
Operating profits are forecasted based on historical experience of operating margins, adjusted for the above
impact of changes to product and fulfilment costs and cost saving initiatives.
(v) Cash conversion
Cash conversion is the ratio of operating cash flow to operating profit. Forecasted cash conversion rates are
based on historical experience.
The discount rates used in the value-in-use calculations are pre-tax and reflect management s estimate of the
time value of money, as well as the risks specific to the CGU. The discount rates have been determined using
the average weighted cost of capital and the current market risk-free rate, adjusted for relevant business risks.
The discount rate is applied in the current year value-in-use model: 15.8% (2022: 15.8%). The consistent discount
rate year-on-year is a result of higher cost of debt and higher market risk assumptions, fully offset by a lower
risk premium due to the divestment in EMEA. A terminal growth rate of 2.5% (2022: 2.5%) has been assumed in
the value-in-use calculation and reflects the long-term growth expectations beyond the five-year forecast
horizon.
The calculations confirmed that there was no impairment of goodwill and brand intangibles from continuing
operations (2022: nil), with excess headroom remaining when performing sensitivity analysis. In performing
the sensitivity analysis, management considered a stressed scenario due to diminishing macro-economic
conditions, and no impairment was identified. Based on what is known at the time of this report including the
current volatility in economic conditions, management believes that any reasonably possible change in the
key assumptions used in the calculations, would not cause the carrying amount to exceed its recoverable
amount.
Refer to Note 4 for separate assessment of impairment for assets held for sale.
NNoottee 1144.. RRiigghhtt--ooff--uussee aasssseettss aanndd LLeeaassee lliiaabbiilliittiieess
Non-current assets
Right-of-use assets
Less: Accumulated depreciation
TToottaall RRiigghhtt--ooff--uussee aasssseettss
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
76,543
(19,545)
39,560
(13,305)
56,998
26,255
60
61
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 85
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1144.. RRiigghhtt--ooff--uussee aasssseettss aanndd LLeeaassee lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
NNoottee 1144.. RRiigghhtt--ooff--uussee aasssseettss aanndd LLeeaassee lliiaabbiilliittiieess ((ccoonnttiinnuueedd))
Current liabilities
Lease liabilities
Non-current liabilities
Lease liabilities
TToottaall lleeaassee lliiaabbiilliittiieess
12,429
9,090
47,535
24,176
59,964
33,266
The consolidated entity leases land and buildings for its office and retail outlets under agreements of between
1 to 10 years with, in some cases, options to extend. The leases have various escalation clauses. On renewal, the
terms of the leases are renegotiated.
The Group commenced a new lease for the G
Sydney, Australia in September 2022 which
has a 10-year term ending in September 2032. An embedded lease was recognised in March 2023 for the USA
warehouse facility in Indiana, USA provided by Radial Inc. for the implementation of set-up costs, ongoing
cost of the distribution center and a facility holding fee which has a 7-year term ending in March 2030.
The lease liability recognised by the Group represents the present value of future lease payments owing to the
lessor.
The Group leases office equipment under agreements of less than 5 years. These leases are either short-term
or low value, so have been expensed as incurred and not capitalised as ROU assets.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial period
are set out below:
CCoonnssoolliiddaatteedd
BBaallaannccee aatt 2277 JJuunnee 22002211
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Exchange differences
BBaallaannccee aatt 33 JJuullyy 22002222
Additions
Disposals
Accumulated depreciation on disposals
Depreciation expense
Exchange differences
BBaallaannccee aatt 22 JJuullyy 22002233
Amounts recognised in profit and loss
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expenses relating to leases not recognised under AASB 16
TToottaall
rriigghhtt--ooff--uussee
aasssseett
$$ 000000
22,442
15,477
(10,450)
7,032
(8,163)
(83)
26,255
41,008
(4,028)
3,660
(9,931)
34
56,998
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
9,938
1,863
1,765
8,163
962
3,286
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at
cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments
made at or before the commencement date net of any lease incentives received, any initial direct costs incurred
and an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at
the present value of the lease payments to be made over the term of the lease, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity s incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any
anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are
expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are
remeasured if there is a change in the following: future lease payments arising from a change in an index or a
rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease
liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the
carrying amount of the right-of-use asset is fully written down.
NNoottee 1155.. TTrraaddee aanndd ootthheerr ppaayyaabblleess
Current liabilities
Trade creditors
Sundry creditors
Other payables
Total trade and other payables
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
7,799
20,834
22,363
37,815
23,655
18,855
50,996
80,325
Refer to Note 26. Financial instruments for further information.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end
of the financial period and which are unpaid. Due to their short-term nature they are measured at amortised
cost and are not discounted. The amounts are unsecured and are usually paid within 60 days of recognition.
Some of the property leases in which the Group is the lessee contain variable lease payment terms that are
linked to sales generated from the leased stores. Variable payment terms are used to link rental payments to
store cash flows and reduce the fixed component of the store cost base.
62
63
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 87
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1166.. BBoorrrroowwiinnggss
Current liabilities
Bank loans (restated)
Non-current liabilities
Bank loans (restated)
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
((RReessttaatteedd))
$$ 000000
1,500
14,000
-
-
On 22 June 2022, the Company entered into a new, multicurrency, revolving debt facility of $60.0m, maturing
on 22 June 2025, including both working capital and acquisition tranches. Included in the facility are covenants
regarding the Group Fixed Charge Cover Ratio and Net Leverage Ratio. The interest rate is BBSY plus an
agreed margin.
In January 2023, the Company amended its existing multi-currency debt facility to $46.5m (2022: $60.0m)
and increased the amount available for working capital. In May 2023, the facility was further amended to
reduce the facility limit from 3 July 2023 to $31.5m. From 1 January 2024 the limit will be reduced by a further
$5m, to $26.5m and from 1 April 2024 by a further $5m, to $21.5m.
Refer to Note 36 for further information on changes in facility limits subsequent to 2 July 2023.
These and subsequent amendments also include the Net Leverage Ratio and Fixed Cover Ratio covenants
being replaced by a Liquidity Ratio from 19 January 2023 until 29 September 2024 and will revert to the
previous Net Leverage Ratio from 1 October 2024.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1166.. BBoorrrroowwiinnggss ((ccoonnttiinnuueedd))
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Corporate credit card
Bank loans
Bank guarantee / Letter of credit
Used at the reporting date
Corporate credit card
Bank loans
Bank guarantee / Letter of credit
Unused at the reporting date
Corporate credit card
Bank loans
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
1,008
45,992
508
47,508
288
1,500
508
2,296
720
44,492
45,212
1,163
59,888
112
61,163
227
14,000
112
14,339
936
45,888
46,824
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
The Group was in compliance with all covenants during the financial year ended 2 July 2023. The interest rate
is BBSY plus an agreed margin.
NNoottee 1177.. PPrroovviissiioonnss
Reclassification of borrowings
Historically all borrowings have been classified as non-current on the basis of the maturity date of the debt
facility being greater than 12 months from the reporting date. Borrowings are classified as current liabilities
unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date. Upon further review of the lending arrangements, the working capital tranche was incorrectly
classified as non-current and the prior year has been restated to reclassify the balance of $14.0m from non-
current to current borrowings. There were no outstanding loans as at FY21 with no restatement required.
Refer to Note 26. Financial Instruments for further information.
Current liabilities
Employee benefits
Lease make good
Onerous contracts
Sales return provision
Restructuring provision
TToottaall pprroovviissiioonnss ccuurrrreenntt
Non-current liabilities
Employee benefits
Lease make good
TToottaall pprroovviissiioonnss nnoonn--ccuurrrreenntt
TToottaall pprroovviissiioonnss
Movements in provisions
Movements in provisions during the current financial period, are set out below:
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
3,699
279
-
2,883
-
3,560
564
660
3,718
286
66,,886611
88,,778888
449
482
993311
422
-
442222
77,,779922
99,,221100
64
65
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 89
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1177.. PPrroovviissiioonnss ((ccoonnttiinnuueedd))
CCoonnssoolliiddaatteedd 22002233
Current provisions
CCaarrrryyiinngg aammoouunntt aatt tthhee ssttaarrtt ooff tthhee ppeerriioodd
Additional provisions recognised
Amounts used
CCaarrrryyiinngg aammoouunntt aatt tthhee eenndd ooff tthhee ppeerriioodd
Non-current provisions
CCaarrrryyiinngg aammoouunntt aatt tthhee ssttaarrtt ooff tthhee ppeerriioodd
Additional provisions recognised
Amounts used
CCaarrrryyiinngg aammoouunntt aatt tthhee eenndd ooff tthhee ppeerriioodd
EEmmppllooyyeeee
bbeenneeffiittss
$$ 000000
SSaalleess rreettuurrnn
pprroovviissiioonn
$$ 000000
OOtthheerr
pprroovviissiioonnss
$$ 000000
TToottaall
$$ 000000
3,560
1,044
(905)
3,699
422
65
(38)
449
3,718
25,696
(26,531)
2,883
-
-
-
-
1,510
-
(1,231)
279
-
482
-
482
8,788
26,740
(28,667)
6,861
422
547
(38)
931
Accounting policy for provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a
result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate
of the consideration required to settle the present obligation at the reporting date, taking into account the risks
and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of
time is recognised as a finance cost.
Lease makegood
The provision represents the present value of the estimated costs to make good the premises leased by the
consolidated entity at the end of the respective lease terms.
Sales return provision
The sales return provision represents managements best estimate of the future outflow of economic benefits
in respect of products sold. The provision is estimated based on historical sales claim information, sales levels
and any recent trends that may suggest future claims could differ from historical amounts.
Restructuring provision
A restructuring provision is recognised when the Group has developed a detailed formal plan for the
restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by
starting to implement the plan or announcing its main features to those affected by it.
Accounting policy for employee benefits
Current employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid
when the liabilities are settled.
Non-current employee benefits
The liability for long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the reporting date on high quality corporate bonds with terms
to maturity and currency that match, as closely as possible, the estimated future cash outflows.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1188.. OOtthheerr lliiaabbiilliittiieess
Current liabilities
Deferred income
Deferred revenue customer loyalty points
Non-current liabilities
Deferred income
TToottaall ootthheerr lliiaabbiilliittiieess
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
3,870
47
3,917
4,268
36
4,304
137
385
4,054
4,689
Accounting policy for deferred income
Deferred income relates mainly to unredeemed gift cards, income received in advance from customers and
deferred lease incentives.
Gift cards are considered a prepayment for goods and services to be delivered in the future. The Group has an
obligation to transfer the goods or services in the future, creating a performance obligation. The Group
recognises deferred revenue for the amount of the prepayment and recognises revenue when the customer
redeems the gift card and the Group fulfils the performance obligation related to the transaction or when the
likelihood of the gift card being redeemed by the customer is deemed remote. These are all deemed current
liabilities.
Income received in advance from customers are recognised as revenue at the point of delivery of the goods to
the customer. Customer orders are typically completed within a few days and income received in advance is
therefore considered short term in nature and is not discounted. These are all deemed current liabilities.
Deferred lease incentives represents operating lease incentives received for those leases not accounted for
under AASB 16 Leases. The incentives are allocated to profit or loss on a straight-line bases over the lease term
and are classified as current and non-current liabilities based on these terms.
Accounting policy for contract liabilities customer loyalty points
The Group operates a loyalty programme where retail customers accumulate points for purchases made which
entitle them to convert points into gift certificates to use on future purchases. A contract liability for the award
points is recognised at the time of the sale. Revenue is recognised when the points are redeemed or when they
expire after 12 months.
66
67
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 91
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 1199.. CCaasshh ffllooww iinnffoorrmmaattiioonn
NNoottee 2200.. SShhaarree--bbaasseedd ppaayymmeennttss
Reconciliation of profit after income tax to net cash from continuing & discontinued operating activities
(Loss) / Profit after income tax expense from continuing & discontinued operations
(99,778)
22,277
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
Adjustments for:
Depreciation, amortisation, and impairment
Share-based payments
Foreign exchange and other differences
Change in operating assets and liabilities:
Decrease / (Increase) in trade and other receivables
Decrease / (Increase) in inventories
Decrease in other assets
Increase in tax receivable
(Increase) / decrease in deferred tax assets
(Decrease)/Increase in trade and other payables
(Decrease)/Increase in provision for income tax
(Decrease)/Increase in other provisions
(Decrease)/Increase in other liabilities
(Decrease) in assets held for sale
Business combinations (opening balances)
NNeett ccaasshh ffrroomm // ((uusseedd iinn)) ccoonnttiinnuuiinngg && ddiissccoonnttiinnuueedd ooppeerraattiinngg aaccttiivviittiieess
Reconciliation of liabilities arising from financing activities:
46,364
(1,126)
(3,382)
3,338
142,138
732
(2,633)
(1,686)
(29,330)
(3,284)
(1,418)
(635)
(19,535)
15,204
185
5,043
(5,405)
(128,940)
2,024
-
478
38,430
1,466
681
917
-
-
(4,254)
29,765
(51,894)
Long-term borrowings
Lease liabilities
Long-term borrowings
Lease liabilities
22002211
CCaasshh fflloowwss
NNoonn--ccaasshh
cchhaannggeess
NNoonn--ccaasshh
cchhaannggeess
AAccqquuiissiittiioonnss NNeeww lleeaasseess
22002222
$$''000000
-
28,054
$$''000000
14,000
(8,040)
28,054
5,960
$$''000000
$$''000000
$$''000000
-
-
-
-
13,252
14,000
33,266
13,252
47,266
22002222
CCaasshh fflloowwss
NNoonn--ccaasshh
cchhaannggeess
NNoonn--ccaasshh
cchhaannggeess
AAccqquuiissiittiioonnss NNeeww lleeaasseess
22002233
$$ 000000
$$ 000000
$$ 000000
$$ 000000
$$ 000000
14,000 (12,500)
(11,247)
33,266
47,266 (23,747)
-
-
-
-
37,945
1,500
59,964
37,945
61,464
-term incentives rewards executives for high performance and ongoing commitment over a
three to five-year horizon and recognises the important role executives play in delivering the long-term growth
of the Group. The Group's long-term incentive plans are equity based and comprise Performance Rights issued
under the Long Term Incentive Plan (LLTTIIPP) and Loan Funded Shares issued under the Loan Funded Share Plan
(LLFFSSPP). Performance Rights and Loan Funded Shares on issue during the current year were:
TTrraanncchhee
GGrraanntt ddaattee PPeerrffoorrmmaannccee
ppeerriioodd eenndd
ddaattee
FFaaiirr VVaalluuee SShhaarree
pprriiccee
ggrraanntt
ddaattee
EExxppeecctteedd
vvoollaattiilliittyy
%%
DDiivviiddeenndd
yyiieelldd
%%
RRiisskk--ffrreeee
iinntteerreesstt rraattee
%%
GGrraanntteedd VVeesstteedd
OOppeenniinngg
bbaallaannccee 44
JJuullyy 22002222
EExxppiirreedd//
ffoorrffeeiitteedd//
ootthheerr
CClloossiinngg
bbaallaannccee 22
JJuullyy 22002233
22CC
44
13/11/2018
30/06/2023
$0.995
$1.17
40.00%
3.50%
2.33% 2,300,000
-
-
-
22,,330000,,000000
25/11/2022 30/06/2025
N/A
$1.32
40.00%
0%
N/A
- 490,419
(490,419)
--
TToottaall PPeerrffoorrmmaannccee RRiigghhttss
22,,330000,,000000 449900,,441199
--
((449900,,441199))
22,,330000,,000000
33
33
33
21/11/2019
30/06/2024
$0.739
$2.68
03/03/2020 30/06/2024
$0.731
$2.79
35.00%
35.00%
16/09/2020 30/06/2024
$0.970
$3.33
40.00%
TToottaall LLooaann FFuunnddeedd SShhaarreess
N/A
N/A
N/A
0.81% 6,298,457
0.81%
667,464
0.29%
474,576
77,,444400,,449977
-
-
-
--
-
-
-
--
-
-
-
--
66,,229988,,445577
666677,,446644
447744,,557766
77,,444400,,449977
Note: During the current reporting period, the impact from the forfeiture of 818,182 loan funded shares under Tranche 3 has been
reflected in the statements of profit and loss and the share-based payment reserve. The actual share buy back and cancellation of the
loan funded shares will occur in the next financial period.
LLTTIIPP TTrraanncchheess
Vesting and conditions of the LTIP tranches are set out below:
Tranche 2C
Vesting Condition 1
Vesting Condition 2
Continued service to August 2023, with no holding lock on resulting shares;
Group underlying EPS (before income tax and share-based payments) performance in accordance
with
the following schedule:
GGrroouupp EEPPSS ffoorr tthhee yyeeaarr ttoo 22 JJuullyy 22002233
PPrrooppoorrttiioonn ooff TTrraanncchhee 22CC PPeerrffoorrmmaannccee RRiigghhttss hheelldd tthhaatt wwiillll ssaattiissffyy
Below $0.1125 (1.5 x FY18 EPS)
$0.1125 ≤ EPS ≤ $0.1200 (1.6 x FY18 EPS)
$0.1200 ≤ EPS ≤ $0.1275 (1.7 x FY18 EPS)
EPS ≥ $0.1275
VVeessttiinngg CCoonnddiittiioonn 22
Nil
50%
75%
100%
As the Group EPS for the year ended 2 July 2023 finished below the minimum performance threshold, all
Tranche 2C performance rights have been valued at nil at 2 July 2023. The rights themselves will only lapse in
August 2023.
68
69
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 93
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
Note 20. Share-based payments (continued)
TTrraanncchhee 44
Vesting Condition 1
Vesting Condition 2
Vesting Condition 3
Cash conversion ratio weighting 50%
Inventory balance weighting 50%
Continued service up to and including 30 June 2025
GGrroouupp CCaasshh ccoonnvveerrssiioonn rraattiioo ffoorr tthhee yyeeaarr ttoo 22
JJuullyy 22002233
1.2 (threshold)
1.5 (target)
Between threshold and target level
GGrroouupp CCaasshh iinnvveennttoorryy bbaallaannccee ffoorr tthhee yyeeaarr ttoo 22
JJuullyy 22002233
$135 million (threshold)
$125 million (target)
Between threshold and target level
PPrrooppoorrttiioonn ooff TTrraanncchhee 44 PPeerrffoorrmmaannccee RRiigghhttss
hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg CCoonnddiittiioonn 11
0%
100%
Straight line pro rata basis between the threshold and target level.
PPrrooppoorrttiioonn ooff TTrraanncchhee 44 PPeerrffoorrmmaannccee RRiigghhttss
hheelldd tthhaatt wwiillll ssaattiissffyy VVeessttiinngg CCoonnddiittiioonn 22
0%
100%
Straight line pro rata basis between the threshold and target level.
*Tranche 4 comprise of the FY23 LTIP granted to the CEO following approval by shareholders, at the
Company AGM on 25 November 2022. Following the release of the Group half year results in February 2023
-year performance, the FY23 LTIP granted to the CEO was cancelled on 27
February 2023. No other FY23 LTIP was issued to any other employee. The FY23 LTIP issued to the CEO
was expensed during the period, to the extent that it was likely to vest.
LLFFSSPP TTrraanncchheess
During the period, nil loan funded shares were forfeited, granted or vested in the period. As at 2 July 2023, the
Loan Funded (LF) shares issued under the LFSP have been treated as in-substance options which have been
valued using a Modified Binomial Lattice option pricing model which allows for varying exercise price. The
resulting value is amortised over the vesting period on a probability adjusted basis.
The key terms of the LFSP are listed as follows:
●
●
●
LF Shares are issued at the Company s share price on the ASX at the time of issue.
The Company advances money to pay for the subscription price of the LF Shares (Loan).
The Loan has an interest payable of 1.9% and is repayable on the earlier of cessation of employment (6 or
12 month grace periods may be applied) or 7 years from the agreement by the Board to issue LF Shares
under the Plan (Vesting Period is 5 years to 30 June 2024).
The Company s recourse in the event it seeks to recover the Loan is limited to the LF Shares. Where a
Participant does not repay the Loan by the repayment date, the Participant is deemed to have agreed to
sell to the Company pursuant to an employee share scheme buy-back, that number of LF Shares required
to repay the Loan to the Company.
The Company will apply the after-tax amount of any dividends payable in respect of a participant s LF
Shares towards repayment of the outstanding balance of the Loan.
The LF Shares offered are subject to Vesting Conditions, which if not met, the unvested LF Shares will be
forfeited and bought back by the Company at the issue price and the Loan will be deemed repaid.
●
●
●
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
Note 20. Share-based payments (continued)
AADDEEPPSS 33--yyeeaarr CCAAGGRR ffrroomm 11 JJuullyy 22001199
12.5%
20%
12.5% ≤ ADEPS CAGR ≤ 20.0%
PPrrooppoorrttiioonn ooff TTrraanncchhee 33 LLFF sshhaarreess tthhaatt wwiillll ssaattiissffyy VVeessttiinngg CCoonnddiittiioonn 22
25%
100%
Straight-line pro rata vesting between 25% and 100% (inclusive)
Vesting Condition 2 was eligible for testing on 3 July 2022. The ADEPS 3-year CAGR from 1 July 2019 to 3 July
2022 was 16.8% meeting the performance threshold for Vesting Condition 2. The proportion of Tranche 3 LF
shares that will satisfy Vesting Condition 2 is 66.3%. The Group has recognised $1.0m in expense in FY23. Vesting
Condition 1 will be tested at the end of FY24.
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting
conditions that do not determine whether the consolidated entity receives the services that entitle the
employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The probability is assessed with consideration of management s expectation of future earnings
and the financial hurdles for vesting. The amount recognised in profit or loss for the period is the cumulative
amount calculated at each reporting date less amounts already recognised in previous periods.
Any market-based performance conditions are taken into consideration in determining fair value. Therefore, any
awards subject to market conditions are considered to vest irrespective of whether or not that market condition
has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Vesting and conditions of the LF Shares are set out below:
TTrraanncchhee 33
Vesting Condition 1
Vesting Condition 2
Continued service to 30 June 2024.
Compound annual growth rate (CAGR) in the Group s Adjusted Diluted Earnings Per Share
(ADEPS) prescribed by the Board over the 3 year period commencing on 1 July 2019, in
which case (subject to satisfaction of Vesting Period Condition) the LF Shares held will
vest in accordance with the following vesting scale:
70
71
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 95
Annual Financial Report 2023 | Annual Financial Statements
BBaallaannccee
BBaallaannccee
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2211.. IIssssuueedd ccaappiittaall
Ordinary shares fully paid
TToottaall iissssuueedd ccaappiittaall
Movements in ordinary share capital
22002233
SShhaarreess
22002222
SShhaarreess
22002233
$$ 000000
22002222
$$ 000000
CCoonnssoolliiddaatteedd
239,360,583
239,360,583
182,167
182,167
239,360,583
239,360,583
182,167
182,167
DDeettaaiillss
DDaattee
SShhaarreess
IIssssuuee pprriiccee
$$ 000000
BBaallaannccee
Performance rights over ordinary shares (net of cost)
Cancellation of Loan funded shares
2277 JJuunnee 22002211
30 August 2021
12 January 2022
33 JJuullyy 22002222
237,338,726
3,256,848
(1,234,991)
239,360,583
182,000
$1.07 3,477
(3,310)
$2.68
182,167
22 JJuullyy 22002233
239,360,583
182,167
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was
seen as value adding relative to the current Company s share price at the time of the investment.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial period.
Accounting policy for issued capital
Ordinary shares are classified as equity.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2222.. RReesseerrvveess
Foreign currency reserve
Share-based payments reserve
Loan funded shares held in trust
Loss Reserve
TToottaall rreesseerrvveess
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
1,905
2,357
(20,322)
(10,991)
(1,144)
3,482
(20,322)
(10,991)
(27,051)
(28,975)
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements
of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net
investments in foreign operations.
Share-based payments reserve
The reserve is used to recognise the cost of share-based payments on the Group s employee incentive schemes.
Loan funded shares
Under the LFSP, the participants are granted a loan by the Company to purchase the beneficial interest in
shares. These are limited recourse loans to the participants and any dividends received in respect of the loan
funded shares are used to reduce the loan balance net of tax payable. Participants are required to meet service
requirements and performance conditions before being entitled to acquire full title to these shares and are
required to repay the loan in order to do so. The shares held by the Company have been deducted from equity
as shares are held in trading lock until vesting in line with accounting standards.
Loss Reserve
The reserve is used to recognise the historical losses of the
Movements in reserves
Movements in each class of reserve during the current and previous financial period are set out below:
CCoonnssoolliiddaatteedd
Balance at 27 June 2021
Cancelation of loan funded shares held in trust
Foreign currency translation
Transferred to issued capital (upon vesting)
Share-based payments expense / (gain)
BBaallaannccee aatt 33 JJuullyy 22002222
Foreign currency translation continued operations
Foreign currency translation discontinued operations
Share-based payments expense / (gain)
LLooaann
ffuunnddeedd
sshhaarreess hheelldd
iinn ttrruusstt
$$ 000000
(23,632)
3,310
-
-
-
(20,322)
-
-
-
LLoossss
RReesseerrvvee
$$ 000000
SShhaarree--bbaasseedd
ppaayymmeennttss
rreesseerrvvee
$$ 000000
FFoorreeiiggnn
ccuurrrreennccyy
ttrraannssllaattiioonn
rreesseerrvvee
$$ 000000
(10,991)
-
-
-
-
(10,991)
-
-
-
7,142
-
-
(3,477)
(183)
3,482
-
-
(1,126)
(6,725)
-
5,581
-
-
(1,144)
843
2,207
-
TToottaall
$$ 000000
(34,206)
3,310
5,581
(3,477)
(183)
(28,975)
843
2,207
(1,126)
BBaallaannccee aatt 22 JJuullyy 22002233
(20,322)
(10,991)
2,356
1,906
(27,051)
RReesseerrvveess
RReesseerrvveess ddiirreeccttllyy aassssoocciiaatteedd wwiitthh aasssseettss hheelldd ffoorr ssaallee
(20,322)
-
(10,991)
-
2,356
-
(301)
2,207
(29,258)
2,207
72
73
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 97
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2233.. ((AAccccuummuullaatteedd lloosssseess)) // RReettaaiinneedd pprrooffiittss
Retained profits at the beginning of the financial period
(Loss) / Profit after income tax expense for the period
((AAccccuummuullaatteedd lloosssseess)) // RReettaaiinneedd pprrooffiittss aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall ppeerriioodd
NNoottee 2244.. EEaarrnniinnggss ppeerr sshhaarree
(Loss) / profit after income tax expense from continuing operations
(Loss) / profit after income tax expense from discontinued operations
Earnings per share for profit from continuing and discontinued operations
(Loss) / Profit after income tax attributable to the owners of City Chic Collective Limited
Weighted average number of ordinary shares
Ordinary shares fully paid
Less: Loan funded shares
WWeeiigghhtteedd aavveerraaggee nnuummbbeerr ooff oorrddiinnaarryy sshhaarreess uusseedd iinn ccaallccuullaattiinngg bbaassiicc eeaarrnniinnggss ppeerr sshhaarree
Adjustments for calculation of diluted earnings per share:
Adjustments for performance rights
Adjustments for loan funded shares
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
57,385
35,108
(99,778)
22,277
(42,393)
57,385
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
(45,038)
(54,740)
24,385
(2,108)
(99,778)
22,277
NNuummbbeerr
NNuummbbeerr
239,360,583
(7,440,497)
231,920,086
238,798,755
(7,440,497)
231,358,258
-
-
1,536,236
1,215,110
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2244.. EEaarrnniinnggss ppeerr sshhaarree ((ccoonnttiinnuueedd))
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of City Chic Collective
Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued
during the financial period.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares. Options under the loan funded share plan could potentially dilute
basic earnings per share in the future, however, were not included in the calculation of diluted earnings per
share because they are antidilutive for the periods presented.
NNoottee 2255.. DDiivviiddeennddss
Dividends
Dividends paid during the financial period and prior period were as follows:
Final dividend for the period (2022: 0 cents per ordinary share)
-
-
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
Weighted average number of ordinary shares used in calculating diluted earnings per share
231,920,086
234,109,604
Performance rights have not been considered for dilution in the current year as they are anti-dilutive for the period presented.
Franking credits
Earnings per share for (loss) / profit from continuing operations attributable to the owners of
City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit/(loss) from discontinued operations attributable to the owners of
City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
Earnings per share for profit attributable to the owners of City Chic Collective Limited
Basic earnings per share
Diluted earnings per share
CCeennttss
CCeennttss
(19.4)
(19.4)
(23.6)
(23.6)
(43.0)
(43.0)
10.5
10.4
(0.9)
(0.9)
9.6
9.5
Franking credits available at the reporting date based on a tax rate of 30%
Franking credits that will (reduce) / arise from the (re)payment of the amount of the provision for
income tax at the reporting date based on a tax rate of 30%
Franking credits available for subsequent financial years based on a tax rate of 30%
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
69,750
66,826
-
946
69,750
67,772
The above amounts represent the balance of the franking account as at the end of the financial period, adjusted
for:
●
franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
●
●
Accounting policy for dividends
Dividends are recognised when declared during the financial period and no longer at the discretion of the
Company.
74
75
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 99
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2266.. FFiinnaanncciiaall iinnssttrruummeennttss
FFiinnaanncciiaall AAsssseettss aanndd LLiiaabbiilliittiieess::
Financial assets and financial liabilities are accounted for at amortised cost. The Directors consider that the
carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements
approximate their fair values:
FFiinnaanncciiaall aasssseettss
Cash and cash equivalents
Trade and other receivables current
Trade and other receivables non-current
FFiinnaanncciiaall lliiaabbiilliittiieess
Trade and other payables
Lease liabilities current
Lease liabilities non-current
Borrowings
CCoonnssoolliiddaatteedd
22002233
$$ 000000
22002222
$$ 000000
12,414
7,583
90
20,087
50,996
12,429
47,535
1,500
112,460
9,953
11,011
-
20,964
80,325
9,090
24,176
14,000
127,591
FFiinnaanncciiaall rriisskk mmaannaaggeemmeenntt oobbjjeeccttiivveess
The consolidated entity s activities expose it to a variety of financial risks: market risk (including foreign currency
risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity s overall risk
management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different
methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in
the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ( Finance ) under policies approved by the
Board. These policies include identification and analysis of the risk exposure of the consolidated entity and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within
the consolidated entity s operating units where necessary. Finance reports to the Board on a monthly basis.
Capital risk management
The consolidated entity s objectives when managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an
optimum capital structure to reduce the cost of capital. The capital risk management policy remains unchanged
from the 2022 Annual Report.
In order to maintain or adjust the capital structure, the consolidated entity manages the level of cash and debt
that is prudent in light of the operational plan and the growth opportunities for the business.
The consolidated entity is subject to certain financing arrangement covenants and meeting these is given
priority in all capital risk management decisions. There have been no events of default on the financing
arrangements during the financial year. Formal notification of this compliance is confirmed on a monthly basis.
The capital structure of the consolidated entity consists of net cash (cash and cash equivalents as detailed in
Note 8. Cash and cash equivalents, less borrowings as detailed in Note 16. Borrowings) and equity of the
consolidated entity (comprising issued capital, reserves and accumulated losses) as detailed in Note 21. Issued
capital, Note 22. Reserves and Note 23. (Accumulated losses) / Retained profits.
MMaarrkkeett rriisskk
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to
foreign currency risk through foreign exchange rate fluctuations.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2266.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial
liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using
sensitivity analysis and cash flow forecasting.
In FY23 approximately 47% of Group continued operating revenue was in USD from its US operations and the
consolidated entity was able to source a similar corresponding amount of its inventory in USD. This natural
hedge meant the Group was not required to hedge its foreign exchange exposure. Management monitors this
natural hedge on an ongoing basis to ensure that the exposure to foreign exchange is acceptable.
Management continue to assess the future cash flows of the international business and if the natural hedge for
USD the Group has enjoyed to-date is no longer in place, exposure will be hedged appropriately.
For the current financial period, if AUD to USD rates had changed by +/- 10% from the FY23 average rates, with
all other variables held constant, the impact on pre-tax loss for the year would have been $3.8m lower/ $4.6m
higher (2022: $0.6m higher/lower).
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The Group has exposure to interest rate risk on borrowings. Borrowings issued at variable rates expose the
Group to interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the consolidated entity had the following variable rate borrowings:
CCoonnssoolliiddaatteedd
Cash and cash equivalents
Borrowings
Net exposure to cash flow interest rate risk
22002233
22002222
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
BBaallaannccee
$$''000000
BBaallaannccee
$$''000000
0.51%
5.69%
12,414
(1,500)
10,914
0.17%
1.84%
9,953
(14,000)
(4,047)
For the current financial period, if interest rates had changed by +/- 100 basis points from the year-end rates
with all other variables constant, the impact on post-tax profit for the year would have been $0.1m higher/lower
(2022: $0.1m higher/lower), relating to the interest income on the cash at bank and interest expense on the
borrowings.
CCrreeddiitt rriisskk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency
credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains
guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date
to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The consolidated entity
does not hold any collateral.
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based
on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an
overall expected credit loss rate for each group. These assumptions include recent sales experience and
historical collection rates.
76
77
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 101
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2266.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
The consolidated entity has a credit risk exposure with trade debtors, which as at 2 July 2023 owed the
consolidated entity $5.3m (2022: $8.3m). There are no guarantees against this receivable but management
closely monitors the receivable balance on a monthly basis and is in regular contact with its customers to
mitigate risk. The Group has recognised a gain of $0.1m (2022: loss of $0.1m) in profit or loss in respect of the
expected credit losses for the year ended 2 July 2023.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure
to make contractual payments for a period greater than 1 year.
LLiiqquuiiddiittyy rriisskk
Prudent liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly
cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become
due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and
available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the
maturity profiles of financial assets and liabilities. Inventory management methods and established supplier
relationships assist management to prepare rolling forecasts of the consolidated entity's cash flow requirements
to monitor the liquidity position and optimise its cash return on investments. Typically the consolidated entity
ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing
of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be
predicted, such as natural disasters.
At balance date, the bank loan facility totalling $46.5m, was available to the Group (3 July 2022: $60.0m
comprising of both working capital and acquisition tranches). The facility limit reduces from 3 July 2023 to
$31.5m, then to $26.5m from 1 January 2024 then again to $21.5m from 1 April 2024 (see Note 36 for further
subsequent changes to the facility after year-end). Management monitors rolling forecasts of the consolidated
facilities below) and cash and cash equivalents
based on expected cash flows. This is generally carried out at a local level in the operating companies of the
consolidated entity in accordance with practice and limits set by the consolidated entity. These limits vary by
location to consider the liquidity of the market in which the entity operates. In addition, the c
liquidity management policy involves projecting cash flows in major currencies and considering the level of
liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external
regulatory requirements and maintaining debt financing plans.
Financing arrangements
Unused borrowing facilities at the reporting date:
Corporate credit card
Bank loans
Refer to Note 36 for further information on subsequent changes in facility limits.
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
720
44,492
45,212
936
45,888
46,824
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2266.. FFiinnaanncciiaall iinnssttrruummeennttss ((ccoonnttiinnuueedd))
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the financial liabilities are required to be paid. The tables include both interest and
principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
CCoonnssoolliiddaatteedd -- 22002233
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank loans
Undiscounted lease liabilities
Total non-derivatives
CCoonnssoolliiddaatteedd -- 22002222
NNoonn--ddeerriivvaattiivveess
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Bank loans
Undiscounted lease liabilities
Total non-derivatives
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
11 yyeeaarr oorr lleessss
$$''000000
BBeettwweeeenn 11 aanndd
22 yyeeaarrss
$$''000000
BBeettwweeeenn 22 aanndd
55 yyeeaarrss
$$''000000
OOvveerr 55 yyeeaarrss
$$''000000
RReemmaaiinniinngg
ccoonnttrraaccttuuaall
mmaattuurriittiieess
$$''000000
-
50,996
-
-
-
50,996
5.69%
4.37%
WWeeiigghhtteedd
aavveerraaggee
iinntteerreesstt rraattee
%%
1,500
14,044
66,540
-
12,942
12,942
-
28,771
28,771
-
13,460
13,460
1,500
69,217
121,713
11 yyeeaarr oorr lleessss
$$''000000
BBeettwweeeenn 11 aanndd
22 yyeeaarrss
$$''000000
BBeettwweeeenn 22 aanndd
55 yyeeaarrss
$$''000000
OOvveerr 55 yyeeaarrss
$$''000000
RReemmaaiinniinngg
ccoonnttrraaccttuuaall
mmaattuurriittiieess
$$''000000
-
80,325
-
-
-
80,325
1.84%
3.00%
-
8,969
89,294
-
8,039
8,039
14,000
16,977
30,977
-
593
593
14,000
34,578
128,903
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
The lease liabilities include holdover assumptions in addition to contractually obligated periods, as disclosed in
Note. 14 Right-of-use assets and Lease liabilities.
FFaaiirr vvaalluuee ooff ffiinnaanncciiaall iinnssttrruummeennttss
This note provides information about how the consolidated entity determines fair values of various financial
assets and financial liabilities.
Fair values of financial instruments are categorised by the following levels:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
- Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices)
- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying
amounts of receivables, trade and other payables are assumed to approximate their fair values due to their
short term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual
maturities at the current market interest rate that is available for similar financial instruments. Refer to Note 4.
Discontinued operations for the fair value of assets held for sale.
78
79
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 103
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2277.. KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
Directors
The following persons were directors of City Chic Collective Limited during the financial period:
Michael Kay
Megan Quinn
Neil Thompson
Natalie McLean
Phil Ryan
Chairman and non-executive director
Non-executive director
Non-executive director
Non-executive director
Chief Executive Officer and Managing Director
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major
activities of the consolidated entity, directly or indirectly, during the financial period:
Peter McClelland
Chief Financial Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Short-term benefits
Long-term benefits
Share-based payments
CCoonnssoolliiddaatteedd
22002233
$$
22002222
$$
2,030,818
117,017
116,414
21,042
(667,890)
2,116,598
124,594
100,954
51,341
(157,633)
1,617,401
2,235,854
Shareholding
The number of shares in the parent entity held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out below:
Directors' shareholding
Ordinary shares:
Michael Kay
Neil Thompson
Natalie McLean
Megan Quinn
Phil Ryan
Total
Other key management personnel shareholding
Ordinary shares:
Peter McClelland
TToottaall
BBaallaannccee aatt tthhee
ssttaarrtt ooff tthhee
ppeerriioodd
NNeett
MMoovveemmeennttss
dduurriinngg tthhee
ppeerriioodd
BBaallaannccee aatt tthhee
eenndd ooff tthhee
ppeerriioodd
800,000
21,000
10,900
-
337,576
1,169,476
200,000
79,000
-
-
41,380
320,380
1,000,000
100,000
10,900
-
378,956
1,489,856
10,284
10,284
-
-
10,284
10,284
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 2288.. RReemmuunneerraattiioonn ooff aauuddiittoorrss
Amounts received or due and receivable by the auditor of the parent entity and any other entity in
the Group for:
Current auditors of the Company Ernst & Young
Auditing the statutory financial report of the parent covering the Group
Auditing the statutory financial reports of any controlled entities
Previous auditors of the Company - Deloitte Touche Tohmatsu
Auditing the statutory financial report of the parent covering the Group
Other services Ernst & Young
Fees for other assurance and agreed upon procedure services
Other services - Deloitte Touche Tohmatsu
Fees for other assurance and agreed upon procedure services
CCoonnssoolliiddaatteedd
22002233
$$
22002222
$$
483,360
124,800
400,400
62,400
-
120,965
608,160
583,765
-
-
-
3,120
11,743
14,863
608,160
598,628
It is the consolidated entity's policy to engage Ernst & Young on assignments additional to their statutory audit
duties where Ernst & Young's expertise and experience with the consolidated entity are important. These
assignments are principally assurance related and other advisory services, or where Ernst & Young is awarded
assignments on a competitive basis. It is the consolidated entity's policy to seek competitive tenders for all
major consulting projects.
NNoottee 2299.. CCoonnttiinnggeenntt lliiaabbiilliittiieess
The consolidated entity had contingent liabilities at 2 July 2023 in respect of:
The Group had a contingent liability of $0.5m (FY22: $0.1m) in the form of a bank guarantee / letter of credit
(see Note 16).
No material losses are anticipated in respect of any of the above contingent liabilities.
80
81
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 105
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3300.. CCoommmmiittmmeennttss
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
TToottaall lleeaassee ccoommmmiittmmeennttss -- ooppeerraattiinngg
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Plant and equipment
CCoonnssoolliiddaatteedd
22002233
$$''000000
22002222
$$''000000
172
1,110
-
1,282
115
448
-
563
1,245
4,118
Lease commitments includes contracted amounts for a small number of retail outlets considered short term
(expiring within less than one year) and contracted amounts for leases not yet commenced as of 2 July 2023
to which the Group is committed.
Lease commitments for the leases not yet commenced includes contracted amounts for a small number of retail
outlets under non-cancellable operating leases expiring within 1 to 5 years. The leases have various escalation
clauses. On renewal, the terms of the leases are renegotiated. The lease commitments do not include rental
payments which may arise in the event that sales revenue exceeds a pre-determined amount.
Capital commitments includes contracted amounts for fit-out costs (net of landlord fit-out contributions)
relating to retail outlets for which the leases have not yet commenced as of 2 July 2023 but to which the Group
is committed.
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3311.. RReellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
Parent entity
City Chic Collective Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 34.
Key management personnel
Disclosures relating to key management personnel are set out in Note 27. Key management personnel and the
remuneration report included in the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Services provided by Southern Cross Shopfitting, a company that is associated with the Cotton on
Group, of which Natalie McLean is Director and Chief Retail Officer 16
Services provided by International Southern Cross Shopfitting (NZ), a company that is associated with
the Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer17
TToottaall rreellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
CCoonnssoolliiddaatteedd
22002233
$$
22002222
$$
578,709
1,642,070
18,834
9,790
597,543
1,651,860
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables
Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton Group, of
which Natalie McLean is Director and Chief Retail Officer15
Trade payables to International Southern Cross Shopfitting (NZ), a company that is associated with the
Cotton on Group, of which Natalie McLean is Director and Chief Retail Officer16
TToottaall rreellaatteedd ppaarrttyy ttrraannssaaccttiioonnss
CCoonnssoolliiddaatteedd
22002233
$$
22002222
$$
11,706
6,557
-
511
11,706
7,068
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date. Refer to note 20 on
information on loan funded share plan.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates. Proposals are
sought from various suppliers and awarded to the best proposal, i.e. a number of suppliers were engaged for
shopfitting services for the period.
82
83
15 Natalie McLean was not involved in decision making related to Southern Cross Shopfitting and its dealings with the Group
16 Natalie McLean was not involved in decision making related to International Southern Cross Shopfitting (NZ) and its dealings with the
Group
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 107
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3322.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn
Set out below is the supplementary information about the parent entity
Statement of profit or loss and other comprehensive income
Revenue
Expenses
(Loss) / Profit before income tax
Impairment on asset
Income tax benefit / (expense)
Profit after income tax from discontinued operations
Total profit after income tax for the year from parent entity
Other comprehensive income / (loss)
Total comprehensive income from parent entity
PPaarreenntt
22002233
$$''000000
22002222
$$''000000
127,355
(131,147)
(3,792)
146,411
(121,916)
24,495
(90,332)
-
1,730
(8,467)
-
(92,394)
-
16,028
- -
16,028
(92,394)
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3322.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
Statement of financial position
PPaarreenntt
22002233
$$''000000
22002222
$$''000000
Cash and cash equivalents
Trade and other receivables
Inventories
Other
Income tax
Intercompany
TToottaall ccuurrrreenntt aasssseettss
Plant and equipment
Investments in subsidiaries
Right-of-use assets
Intangibles
Deferred tax
TToottaall nnoonn--ccuurrrreenntt aasssseettss
TToottaall aasssseettss
Trade and other payables
Intercompany
Lease liabilities
Income tax
Borrowings (restated)
Provisions
Other
TToottaall ccuurrrreenntt lliiaabbiilliittiieess
Lease liabilities
Provisions
Other
TToottaall nnoonn--ccuurrrreenntt lliiaabbiilliittiieess
TToottaall lliiaabbiilliittiieess
NNeett AAsssseettss
Issued capital
Loss reserve
Share-based payments reserve
Retained (losses) / profits
TToottaall eeqquuiittyy
1,808
858
2,013
1,028
16,783 39,273
2,833
-
86,015
131,162
2,012
2,390
-
23,851
12,330
127,620
32,784
2,970
3,493
179,197
14,263
130,132
23,842
3,021
2,161
173,419
203,048
304,581
25,857
21,883
12,068
-
1,500
4,659
1,344
67,311
26,872
449
137
27,458
50,188
-
8,708
946
14,000
4,574
1,413
79,829
21,724
422
384
22,530
94,769
102,359
108,279
202,222
182,167
182,167
(10,991)
(10,991)
(18,389) (16,840)
47,886
(44,508)
108,279
202,222
Reclassification of borrowings
Historically all borrowings have been classified as non-current on the basis of the maturity date of the debt
facility being greater than 12 months from the reporting date. Borrowings are classified as current liabilities
unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date. Upon further review of the lending arrangements, the working capital tranche was
incorrectly classified as non-current and the prior year has been restated to reclassify the balance of $14.0m
from non-current to current borrowings.
84
85
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 109
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3322.. PPaarreenntt eennttiittyy iinnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3333.. BBuussiinneessss ccoommbbiinnaattiioonnss ((ccoonnttiinnuueedd))
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The guarantee disclosures of the parent entity is referred to in Note 35. Deed of cross guarantee.
Details of the purchase consideration, and finalised fair values of the net assets acquired and goodwill at the
date of acquisition are as follows:
Contingent liabilities
The above disclosure does not include contingent rental payments which may arise in the event that sales
revenue exceeds a predetermined amount.
Cross guarantees by and between City Chic Collective Limited and Specialty Fashion Group No.5 Pty Limited.
These are described in Note 35. Deed of cross guarantees. No deficiencies of assets exist in any of these
companies.
Capital commitments - Property, plant and equipment
The parent entity had capital commitments for plant and equipment as at 2 July 2023 of $1.2m (2022: $0.5m).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in
Note 1, except for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt
may be an indicator of an impairment of the investment.
NNoottee 3333.. BBuussiinneessss ccoommbbiinnaattiioonnss
Current year business combinations
There are no business combinations for the year ended 2 July 2023 for the Group.
Prior year business combinations
On 23 July 2021, the Group completed the acquisition of the Navabi business, where CCX acquired all the assets
and liabilities of Navabi for cash consideration of 6.0m (A$9.6m) in cash.
During the 53-week period ending 3 July 2022, the provisional accounting for the acquisition of the Navabi
Assets was finalised.
Cash
Inventory
Prepaid deposits and other assets
Customer relationships
Brand
Deferred tax asset
Deferred tax liability
Provisions and payables
Tax liabilities
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Amount settled in cash on acquisition
Acquisition costs expensed to profit or loss
FFaaiirr vvaalluuee
$$ 000000
5,377
904
608
164
1,347
190
(453)
(3,545)
(1,903)
2,689
6,942
9,631
9,631
486
The goodwill is attributable to the profitability of the acquired business. It will not be deductible for tax purposes.
Revenue contributions
The acquired business contributed revenues of $6.4m to the Group for the period from 23 July 2021 to 3 July
2022. For the 53 weeks ending 3 July 2022 revenue was $6.6m.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of
any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the
acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable net assets.
All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
operating or accounting policies and other pertinent conditions in existence
at the acquisition-date.
Business combinations were initially accounted for on a provisional basis and subsequently finalised for the 53-
week period ended 3 July 2022. The acquirer retrospectively adjusts the provisional amounts recognised and
also recognises additional assets or liabilities during the measurement period, based on new information
obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the
information possible to determine fair value.
86
87
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 111
Annual Financial Report 2023 | Annual Financial Statements
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3344.. IInntteerreessttss iinn ssuubbssiiddiiaarriieess
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
NNootteess ttoo tthhee ccoonnssoolliiddaatteedd ffiinnaanncciiaall ssttaatteemmeennttss
22 JJuullyy 22002233
NNoottee 3366.. EEvveennttss aafftteerr tthhee rreeppoorrttiinngg ppeerriioodd
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries
in accordance with the accounting policy described in Note 1:
The Group divested the Evans business and EMEA inventory via an asset sale and purchase agreement (the
Agreement). AK Retail Holdings Limited (AK Retail Holdings), has acquired the Evans brand, intellectual
property and customer base under the Agreement that was signed and closed on 3 August 2023. The
NNaammee
Specialty Fashion Group No. 5 Pty Limited
City Chic Collective No. 1 Pty Limited
City Chic Collective No. 2 Pty Limited
Specialty Fashion Group No. 6 Pty Limited
City Chic International Pty Limited
City Chic Collective New Zealand Limited
City Chic Collective UK Limited
Specialty Fashion Group South Africa (Pty) Ltd17
JPC United GmbH
City Chic Collective USA Incorporated
NNoottee 3355.. DDeeeedd ooff ccrroossss gguuaarraanntteeee
PPrriinncciippaall ppllaaccee ooff bbuussiinneessss //
CCoouunnttrryy ooff iinnccoorrppoorraattiioonn
Australia
Australia
Australia
Australia
Australia
New Zealand
England and Wales
South Africa
Germany
United States
OOwwnneerrsshhiipp iinntteerreesstt
22002233
%%
100.0%
80.0%
100.0%
100.0%
100.0%
100.0%
100.0%
-
100.0%
100.0%
22002222
%%
100.0%
80.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
The following entities are party to a deed of cross guarantee under which each company guarantees the debts
of the others:
City Chic Collective Limited
Specialty Fashion Group No.5 Pty Limited
The above companies (where incorporated in Australia) represent a 'Closed Group' for the purposes of the
Corporations Instrument 2016/785 (ASIC Instrument), and as there are no other parties to the deed of cross
guarantee that are controlled by City Chic Collective Limited, they also represent the 'Extended Closed Group'.
All companies in the Closed Group are dormant, except for City Chic Collective Limited. The financial results of
the Closed Group are the same as the financial results of the parent entity which are disclosed in Note 32. Parent
entity information.
Under the Agreement, AK Retail Holdings has paid City Chic a total cash consideration of £8m. Net of
transaction costs, and
City Chic has agreed with its 3PL provider to close its UK warehouse which also supports its European
operations. As a result, the Navabi business has ceased trading. City Chic retains the right to trade under the
City Chic, Avenue and other non-Evans brands in EMEA in the future. There will be a transition period for AK
Retail Holdings to sell all non-Evans branded product and for City Chic to sell its remaining Evans-branded
product in ANZ and North America.
The proceeds from the sale of Evans have been
remaining $1.5m acquisition facility. As a result, on 9 August 2023
reduced to $20m (from $31.5m) and will reduce by a further $5m at the end of June 2024, reducing its
funding costs.
No other matter or circumstance has arisen since 2 July 2023 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of
affairs in future financial years.
17 On 9 June 2023 the Group deregistered Specialty Fashion Group South Africa (Pty) Ltd.
88
89
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 113
Annual Financial Report 2023 | Annual Financial Statements
Annual Financial Report 2022 | Corporate Governance Statement
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee GGoovveerrnnaannccee SSttaatteemmeenntt
22 JJuullyy 22002233
The directors are committed to the principles underpinning best practice in corporate governance, applied in a
manner which is best suited to the Group and its controlled entities and to best addressing the directors'
accountability to shareholders and other stakeholders.
In formulating the governance principles that guide the operations of the Group, the directors have taken into
account the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice
Recommendations (4th edition). This is supported by an overriding organisation wide commitment to the
highest standards of legislative compliance and financial and ethical behaviour.
the Board
Details of the Group’s Corporate Governance Statement as well as key policies and practices and the charters
for
the Group’s website
(https://www.citychiccollective.com.au/corporate-governance), including performance against measurable
objectives. The Corporate Governance Statement will be lodged with ASX at the same time that this Annual
Report is lodged with ASX.
available on
committees
each of
and
are
its
The Corporate Governance Statement outlines the Group's main corporate governance practices and policies
in place during the year-ended 2 July 2023 (unless otherwise stated) and are current as at 8 September 2023
and have been approved by the Board. The Board is comfortable that the practices are appropriate for a
Company of City Chic Collective Limited’s size.
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 115
Annual Financial Report 2023 | Annual Financial StatementsCCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd22JJuullyy2200223390In the directors' opinion:●the attached financial statements and Notes comply with the Corporations Act 2001, the AccountingStandards, the Corporations Regulations 2001and other mandatory professional reporting requirements;●the attached financial statements and Notescomply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in Note1 to the financial statements;●the attached financial statements and Notes give a true and fair view of the consolidated entity's financial position as at 2July2023and of its performance for the financial period ended on that date;●there are reasonable grounds to believe that the Company will be able to pay its debts as and when theybecome due and payable; and●at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtueof the deed of cross guarantee described inNote35to the financial statements.The directors have been given the declarations required by section 295A of the Corporations Act 2001.Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.On behalf of the directorsMichael KayPhil RyanChairmanChief Executive Officer and Managing Director30August2023
Annual Financial Report 2022 | Shareholder information
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
22 JJuullyy 22002233
The shareholder information set out below was applicable as at 8 September 2023.
DDiissttrriibbuuttiioonn ooff eeqquuiittaabbllee sseeccuurriittiieess
Analysis of the number of ordinary shareholders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
NNuummbbeerr ooff
hhoollddeerrss ooff
oorrddiinnaarryy
sshhaarreess
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
2,067
2,280
747
1,004
144
6,242
2,198
0.42
2.50
2.48
12.75
81.85
100
979,304
5,798,710
5,754,745
29,564,966
189,822,361
231,920,086
-
1,122,157
Analysis of the number of shareholders, holding restricted and unquoted fully Loan Funded (LF) paid ordinary
shares issued pursuant to an employee incentive scheme, by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
NNuummbbeerr ooff
hhoollddeerrss ooff
uunnqquuootteedd
oorrddiinnaarryy
sshhaarreess
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
-
-
-
-
8
8
-
-
-
-
100.0
100.0
-
-
-
-
7,440,497
7,440,497
Analysis of the number of holders, holding restricted and unquoted performance rights issued under an
employee incentive scheme, by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
NNuummbbeerr ooff
hhoollddeerrss ooff
ppeerrffoorrmmaannccee
rriigghhttss
%% ooff eeqquuiittyy
sseeccuurriittiieess iinn
tthhiiss ccllaassss
NNuummbbeerr ooff
sseeccuurriittiieess
-
-
-
-
5
5
-
-
-
-
100.00
100.00
-
-
-
-
2,300,000
2,300,000
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
SShhaarreehhoollddeerr iinnffoorrmmaattiioonn
22 JJuullyy 22002233
EEqquuiittyy sseeccuurriittyy hhoollddeerrss
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Name
A/C designation
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
T BATSAKIS PTY LTD
BNP PARIBAS NOMS PTY LTD
PALM BEACH NOMINEES PTY LIMITED
ANACACIA PTY LTD
HENOCH INVESTMENTS PTY LTD
Ordinary shares
Number held
% of total
shares
issued
51,018,665
21.31
25,272,013
10.56
19,101,607
7.98
13,979,684
5.84
7,230,000
3.02
6,535,137
2.73
5,047,883
2.11
4,905,663
2.05
4,000,000
1.67
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,793,251
1.58
LANDPEAK PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
GARRETT SMYTHE LTD
ROSSBOW PTY LTD
2,050,000
0.86
3,050,000
1.27
2,461,702
1.03
2,407,800
1.01
BYTENEW INVESTMENTS PTY LIMITED
R I FINANCES PTY LTD
SAND IN A GLASS PTY LTD
BIBI NOMINEES PTY LTD
AVENUE 8 PTY LIMITED
1,575,413
0.66
1,300,000
0.54
1,286,654
0.54
1,100,000
0.46
1,000,000
0.42
BNP PARIBAS NOMINEES PTY LTD
975,888
0.41
Unquoted equity securities
The Company has unquoted fully paid ordinary shares issued pursuant to an employee incentive scheme, and
unquoted performance rights on issue, as detailed more fully above.
158,091,360
66.05
SSuubbssttaannttiiaall hhoollddeerrss
Substantial holders in the company are set out below:
SPHERIA ASSET MANAGEMENT
BBFIT INVESTMENTS
PINNACLE INVESTMENT MANAGEMENT
VVoottiinngg rriigghhttss
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Number held
38,685,823
23,763,44
12,051,501
% of total
shares issued
16.16
9.93
5.03
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
Performance Rights
Performance rights carry no voting rights.
There are no other classes of equity securities.
2
3
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 117
Annual Financial Report 2022 | Company Directory
CCiittyy CChhiicc CCoolllleeccttiivvee LLiimmiitteedd
CCoorrppoorraattee ddiirreeccttoorryy
22 JJuullyy 22002233
Directors
Michael Kay - Chairman and non-executive director
Megan Quinn - Non-executive director
Phil Ryan - Chief Executive Officer and Managing Director
Natalie McLean – Non-executive director
Neil Thompson – Non-executive director
Company secretary
Marta Kielich (resigned 21 July 2023)
Jacquie Shanahan (appointed 21 July 2023)
Peter McClelland (additional Company Secretary appointed 21 July 2023)
Registered office
Principal place of business
Share register
Auditor
Solicitors
Bankers
151-163 Wyndham Street
Alexandria, NSW 2015
Telephone: (02) 9059 4300
151-163 Wyndham Street
Alexandria, NSW 2015
Telephone: (02) 9059 4300
Link Market Services Limited
Level 12, 680 George Street
Sydney, NSW 2000
Telephone: (02) 8280 7111
Facsimile: (02) 9287 0303
Ernst & Young
200 George Street
Sydney, NSW 2000
Thomson Geer
Level 25, 1 O’Connell Street
Sydney, NSW 2000
National Australia Bank
255 George Street
Sydney, NSW 2000
Stock exchange listing
City Chic Collective Limited shares are listed on the Australian Securities
Exchange (ASX code: CCX)
Website
http://www.citychiccollective.com.au
Corporate Governance
Statement
https://www.citychiccollective.com.au/corporate-governance
ABN
43 057 569 169
4
References
PAGE 7, 2023 SNAPSHOT
1Active customers include customers who have shopped online, in stores and omni-channel in the last 12 months;
excludes wholesale and marketplace customers
2Online represents websites and online marketplace sales; based on last 12 months revenue to remove seasonality
impacts
3Traffic to Online excludes traffic to Online Marketplaces
FY2023 CITY CHIC COLLECTIVE ANNUAL REPORT 119
CITY CHIC COLLECTIVE
151–163 Wyndham Street,
Alexandria NSW 2015
Australia
ABN 43 057 569 169
P +61 2 9059 4300