Australian multichannel retailer City Chic Collective Limited (ASX: CCX) reports that has been nominated as the “Stalking Horse Bidder” for the e-commerce assets of US-based Avenue Stores, LLC.
Established more than 30 years ago, Avenue is a specialty retailer of plus size apparel, targeting women aged 25 to 55. Avenue entered into Chapter 11 bankruptcy in August 2019 and has been closing its physical store network.
As part of this process, Avenue’s e-commerce assets, which include a well-established customer database and inventory, have been offered for sale via auction in early October.
As Stalking Horse Bidder, City Chic has entered into an asset purchase agreement that is subject to City Chic being the highest bidder at the auction and approval by the US Bankruptcy Court in Delaware.
There is therefore no guarantee City Chic will be successful in its bid to acquire the Avenue e-commerce assets. City Chic will keep the market updated as the transaction progresses.
The Stalking Horse offer for the e-commerce assets is US$10.0 million. If City Chic is the successful acquirer, the transaction will be funded by a combination of cash and debt.
The expected date of completion would be mid-October 2019.
City Chic told the ASX that the acquisition of Avenue’s e-commerce assets would provide City Chic with access to the significant value segment of the US plus size market.
In court filings, Avenue disclosed sales of US$75.3m and negative EBITDA of US$0.9m for the group from January through May 2019, and an e-commerce sales contribution of 36% of group sales.