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- City Chic Collective has been nominated as the stalking horse bidder for the e-commerce assets of Avenue Stores LLC
- Avenue is a U.S.-based specialty retailer who, for over 30 years, has sold plus-sized clothing targeting women aged 25 to 55
- Avenue filed for bankruptcy last month and has since been closing all of its 222 physical stores
- Purchasing Avenue’s assets would provide City Chic with access to the significant value segment of the U.S. plus size market
City Chic Collective has been nominated as the stalking horse bidder for the e-commerce assets of Avenue Stores LLC, which is to be auctioned early next month.
A stalking horse offer or bid is an initial bid on a bankrupt company’s assets that is arranged in advance of an auction to act an effective reserve bid.
Avenue is a U.S.-based specialty retailer who, for over 30 years, has sold plus-sized clothing targeting women aged 25 to 55.
Unfortunately, Avenue filed for bankruptcy last month and has since been closing all of its 222 physical stores in over 30 states across the U.S.
As part of this process, Avenue has offered up its e-commerce assets, including a well-established customer base and inventory, for sale.
Purchasing Avenue’s assets would provide City Chic with access to the significant value segment of the U.S. plus size market.
City Chic is a leading Australian multi-chain retailer of plus size apparel, accessories, and footwear for women.
It has a network of 104 stores across Australia and New Zealand and is fast-emerging into North America and Europe.
The stalking horse offer for Avenue’s assets is US$10 million. If City Chic wins the auction, the transaction will be funded by a combination of cash and debt.
As the stalking horse bidder, City Chic has entered into an asset purchase agreement subject to it being the highest bidder and approval by the U.S. Bankruptcy Court in Delaware.
There is no guarantee City Chic will be the highest bidder.
Avenue reported sales of $75.3 million and negative earnings before interest, tax, depreciation and amortisation (EBITDA) of $0.9 million from January 2019 to May 2019, and an e-commerce sales contribution of 36 per cent of group sales.
City Chic will continue to conduct due diligence and assess the opportunity despite the impact of the bankruptcy process and store closures on the e-commerce business.
If the bid is successful, the transaction will be funded and expected to be completed in mid-October.
