UOL Accounting for Managers 2021 Annual Report Worksheet

2021ANNUAL REPORT
Contents
04
16
20
24
25
26
28
32
123
Overview
Message from our Chairman and CEO
Board of Directors
City Chic Annual Recap
2022 Outlook
Diversity
Corporate Social Responsibility
Annual Financial Report 2021
References
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
3
Annual Financial Report 2021 | City Chic Collective Overview
We are
Global
Plus-size
Customer led
Omni Channel
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
5
Annual Financial Report 2021 | City Chic Collective Overview
A GLOBAL COLLECTIVE
OF PLUS-SIZE BRANDS
City Chic Collective is a global
retailer specialising in plus-size
women’s apparel and footwear.
Our customer-led offering,
which appeals to fashionforward women, has a strong
following in Australia, USA, UK,
Europe and New Zealand.
EVERYDAY ESSENTIAL FASHION
FIERCELY FASHIONABLE
FASHION FOR YOUR SHAPE
SERIOUS STREET STYLE
LUSTFUL LINGERIE
PREMIUM WIDE-FIT FOOTWEAR
Our omni-channel model
comprises of multiple websites
in Australasia, USA, UK and
Europe. The collective of
brands are also available
through marketplace and
wholesale partners in the US,
Canada, UK and Europe.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
7
Annual Financial Report 2021 | 2021 Snapshot
2021 SNAPSHOT
SALES
$258m
1.07m
ACTIVE CUSTOMERS
73%
ONLINE PENETRATION
58m
ANNUAL ONLINE TRAFFIC
3
KEY REGIONS GLOBALLY
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
9
Annual Financial Report 2021 | City Chic Collective Overview
Growing into a Global Digital Retailer
Customer-Centric Operating Model
CONTRIBUTION BY CHANNEL
4%
2%
4%
1%
26%
er
om .
st ain
cu ch
e, ly
tiv pp
ac su
Re led
CONTRIBUTION BY REGION
1%
40%
6%
38%
FY20
59%
ANZ
Americas
OUR CUSTOMERS
ARE AT THE HEART
OF EVERYTHING
WE DO!
FY21
1.0
56%
7m
Act
L
Ex on
ec gs
ut tan
ive d
Te ing
am
.
Wholesale
gr Hig
ow hl
in y-e
g
cu nga
st ge
om d
er an
ba d
se
.
Online Marketplaces
er
om
st y.
cu teg
el tra
nn t s
ha in
-c o
ni chp
u
Stores
Online Website
to
61%
m
71%
O
FY21
FY20
31%
ive Custome
lo
G
rs
l
ba
ly
EMEA
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
11
Annual Financial Report 2021 | City Chic Collective Overview
Global Business Overview
AMERICAS
EMEA
AUSTRALIA & NEW ZEALAND
$100M REVENUE
$14M REVENUE4
$144M REVENUE
Wholesale
2%
Wholesale
6%
Marketplace
1%
Marketplace
4%
Online
Websites
94%



522k Active Customers1
32m Annual Traffic2
A$180 Avg Annual Spend3
USA fulfilment site in Dallas
Canada fulfilment site in Ontario
Office in New Jersey
Stores
46%
Online
Websites
54%
Online
Websites
94%




120k Active Customers1,4
7m Evans Traffic Since Acquisition2,4
A$110 Avg Spend Since Acquisiton3,4
This does not yet include Navabi
acquired in July 2021
UK fulfilment site in Gateshead
European fulfilment site in NW Germany
Office in London



428k Active Customers1
19m Annual Traffic2
A$337 Avg Annual Spend
ANZ fulfilment site in Sydney
89 stores at end of June
Head office in Sydney
Please refer to page 123
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
13
Annual Financial Report 2021 | City Chic Collective Overview
Financial Performance
SALES GROWTH
EARNINGS GROWTH
SALES $M
UNDERLYING EBITDA1 $M
$258.5
$42.4
$194.5
$139.5
$148.4
$131.9
$26.5
$19.9
$89.7
$73.0
$61.4
$70.4
$75.4
FY18
FY19
1H
2H
$119.0
FY20
FY21
$7.4
$9.1
$6.9
$104.8
$19.1
$24.9
$13.0
$15.8
FY18
FY19
1H
2H
$19.1
$23.3
FY20
FY21
GLOBAL CUSTOMER BASE GROWTH
INCREASED ONLINE PENETRATION
CUSTOMER NUMBERS2 ‘000
ROLLING 12-MONTH GLOBAL ONLINE SALES3 $M
+61%
growth
+72%
growth
1,070
385
JUN 19
515
663
44%
online
sales
53%
online
sales
801
DEC 19 JUN 20 DEC 20 JUN 21
65
JUN 19
93
65%
online
sales
127
73%
online
sales
151
73%
online
sales
189
DEC 19 JUN 20 DEC 20 JUN 21
Please refer to page 123
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
15
Annual Financial Report 2021 | Comments by our Chairman and CEO
Message from
Our Chairman and CEO
The COVID-19 pandemic continued throughout the
2021 financial year requiring the Company to adapt
and innovate its business model to ensure ongoing
sustainability and profitable growth. In circumstances
where planning and anticipating the future was
almost impossible, a lot was asked of City Chic team
members. Under the calm, yet determined, leadership
of the executive team, our people performed
superbly. The Company not only recorded strong
profitable growth but also materially diversified its
geographic footprint, expanded its range, invested
in the future and made good progress towards our
vision of leading a world of curves.



Here are some of the highlights:
• Sales Revenue grew by 32.9% and comparable
sales growth (CSG) was 31.6%
• Underlying EBITDA grew by 59.8% to $42.4m
Pre-AASB16 (16.4% margin) and $50.2m PostAASB16
• Statutory NPAT from continuing operations was
$21.6m (135.3% growth) and Underlying NPAT
(Pre-AASB16) was $24.9m (80.6% growth)
• Normalised operating cash flow of $24.2m (FY20:
$20.9m)
• Global customer base growth of 61% YoY to 1.07m
active customers
• Global customer website traffic growth of 68%
YoY to 58.1m visits
• Online sales growth of 49.3%, with 73% online
penetration
• Sales outside of ANZ totalled 44.1% of group
revenue
• Signed new partnerships with Next, Curvissa,
Freemans, HBC, Debenhams, Very, Zalando,
Amazon, Walmart, Target, Ebay, David Jones and
The Iconic
• Strong balance sheet with net cash of $71.5m

at 27 June 2021 and undrawn debt facility of
$40.0m; completed $111.1m equity raise in JulyAugust 2020
Completed strategic acquisitions of plus-size
brand Evans in the UK in December 2020 and
European plus-size online marketplace Navabi in
July 2021Commenced the process of diversifying
our supply chain to offset the concentration risk
in China. We are now sourcing from Bangladesh,
Vietnam, Cambodia and Morocco
Developed and trialled new product segment and
lifestyle ranges using brands that include Refinity,
Arna York, Societie+, Zim & Zoe and Aveology
Continued to develop and trail the online “world
of curves” marketplace for plus size, for all our
brands in our four key regions
Further development of our ESG /Ethical Trade
program, including the roll out of worker surveys
and strengthening of our cotton regions ban
As can be seen, notwithstanding the complexity
posed by the pandemic, FY21 was a very busy
and productive year for City Chic. Management
has succeeded in simultaneously preserving and
expanding the core of the business whilst also
investing in future income streams. Importantly,
these new developments have the double benefit of
adhering to our strategy of operating purely within the
plus-size market and, at the same time, diversifying
risk, both geographically and from a product
perspective.
COVID-19 demonstrated the benefits of this
innovation and adaptability. Our geographical scope
protected us from rolling lockdowns and economic
disruption as timings were different between
Northern and Southern Hemispheres and as between
individual countries and states. Our increased
CHAIRMAN MICHAEL KAY
range and efficient supply chain allowed us to pivot
between the products our customers were seeking at
various times during the pandemic. In lockdowns we
could move away from party dresses and work wear
to casual, intimates and “zoom-wear”.
Australian stores suffered during the rolling
lockdowns, particularly in Victoria and later in NSW.
However, each time they reopened, the response
from customers was very strong. In the meantime,
our customers were buying online and our expanded
range allowed us to deliver what she wanted, when
she wanted it and at the right price point.
Avenue has proved to be a very good acquisition.
Not only has it given us a higher profile in our biggest
market, but it has also allowed us to introduce our
other product segments to US customers. This
has been extremely well received and has driven
our strategy to give her the choice of assortment
and offer all of our product streams to all of our
customers globally. We are delighted with the way
our business is developing in the USA. We have only
just begun and we see a substantial runway of growth
opportunities in this USD$49bn market. Continuing
to develop our US business both organically and
inorganically are key priorities for us.
FY21 saw another important milestone in our journey
to lead a world of curves. In December 2020, we
purchased the Evans business in the UK. Evans has
been a retailer of plus sized women’s wear for almost
100 years, both through high street shops and more
recently online. We only acquired the Evans brand,
eCommerce and wholesale businesses, and Evans
stores were closed. The business was somewhat
run-down when we acquired it, having been part of
the Arcadia Group which slid into administration in
CEO & MANAGING DIRECTOR PHIL RYAN
November 2020. The second half of FY21 was spent
transitioning the business from Arcadia systems and
warehousing into our City Chic systems and a new
warehouse. We also had to build back inventory
and increase the range available to customers. In
this sense, the task has been very similar to that in
Avenue. The early signs for Evans are promising,
and our success in revitalizing Avenue and getting
customers to accept it as online-only, gives us
confidence we can restore Evans to its former
position and establish ourselves as a leader in the
UK plus size market. We have introduced all of our
product streams and brands to the UK customer
through the Evans ‘world of curves’ website/
marketplace. Evans also had distribution channels
through Europe and the Middle East and we see an
opportunity to grow our business meaningfully in
those locations.
In July 2021 we acquired Navabi, a marketplace
business in Europe, domiciled in Germany and
serving mostly German customers. The Navabi
integration is proceeding ahead of plan and the
initial reads on the loyalty of this customer to the
marketplace have been pleasing. Inventory levels
will take time to rebuild and in the short term we will
re-position global inventory to Europe. Navabi’s loyal
customer base is focused on size, fit and quality.
Navabi’s websites had 5.8m customer visits in 2020,
generating €10.4m (A$16.6m) in sales revenue, and
pre-pandemic annual traffic exceeded 10m visits.
Navabi is an important beachhead for us into Europe
and growing the European business, both organically
and inorganically, is a priority for us. We plan to further
develop this marketplace with all our brand offerings
and seek to expand its predominantly German
geographical scope to cover the rest of Europe.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
17
Annual Financial Report 2021 | Comments by our Chairman and CEO
We now have strong traffic driving digital store fronts
in our 4 key markets. In Australia we have citychic.
com.au, Avenue.com in the USA, Evans.co.uk in
the UK and our most recent addition, Navabi.de
in Europe. Together these drive around 70 million
annual visits globally and give us a strong position in
terms of global digital reach in the USD$180bn plus
size market. This has created a platform for us to
continue to increase market share by delivering our
complete product range to the plus size customer
globally or a “world of curves”.
COVID-19 UPDATE
In FY21, the ANZ store network was impacted
by several periods of closures in response to
government direction. Over the financial year, there
were approximately 3,655 equivalent store days
closed (over 10% of total equivalent store days in
FY21) including 2,910 in Victoria, 177 in NSW, 176 in
Queensland, 147 in Western Australia, 49 days in
Northern Territory, 34 in South Australia, 12 in ACT, 7 in
Tasmania and 143 in New Zealand.
Following the end of the financial year, the ANZ store
network continued to be impacted by varying periods
of temporary closures. During the first 8 weeks of
FY22, there were approximately 1,646 equivalent
store days closed (c.33% of total equivalent store
days over the period) including 764 in NSW, 565 in
Victoria, 178 in Queensland, 40 in Western Australia,
32 in South Australia, 20 in ACT, 7 in Northern
Territory and 40 in New Zealand. Stores in NSW (15),
Victoria (18), ACT (2) and New Zealand (4) remain
temporarily closed as of the date of this report.
Throughout FY21 the US experienced significant
waves of COVID-19 and various extended
government directed restrictions, which caused
disruption to labour, logistics and consumer spending
during the period. There was significant disruption
to labour in warehousing and fulfilment and large
surcharges imposed by freight carriers, in particular
during peak seasonal trade in November 2020 to
January 2021. Aligned with the acceleration of the
vaccine roll-out in early 2021, restrictions were eased
which resulted in a rebound in consumer spending
from March 2021 onwards.
At the time of the acquisition of Evans, the UK was
in heavy government-imposed lockdowns. An
acceleration in vaccinations resulted in an easing of
restrictions from May 2021 and an improvement in
consumer spending. There has been an impact on
logistics and labour in the UK, but less severe than
that experienced in the US in 1H FY21.
COVID-19 continues to cause disruption to logistics
globally and to stores in Australia, as well as causing
uncertainty and volatility in consumer confidence
and spending. Further to this there have been
international shipping delays and price increases
that have impacted global supply chains. With an
increased lead time from the initial COVID-19 supply
issues and higher production volumes we have been
able to offset these delays and costs increases.
With geographic and channel diversification, a strong
cash position, loyal customers who like to buy online,
and a focus on executing on the long-term plans for
the business, we believe City Chic is well positioned
to navigate the conditions and capitalise on the
recovery.
Financial Position and Dividend
City Chic’s net cash position at 27 June 2021 was
$71.5m with no debt drawn under the existing $40m
debt facility which matures in February 2023.
City Chic completed an equity raising of $111.1m in
the first quarter to strengthen the balance sheet and
accelerate the Company’s global growth ambitions.
This comprised of, in July 2020, a fully underwritten
$80.0m Placement of new fully paid ordinary shares
to eligible institutional investors conducted at
$3.05 per share. Following the completion of the
Placement, in August 2020 City Chic offered all
eligible shareholders the opportunity to participate in
a non-underwritten Share Purchase Plan (SPP). City
Chic raised $31.1m through the SPP, also conducted
at $3.05 per share. A total of 36.4 million new shares
were issued through the Placement and SPP.
A cash payment of $40.2m was made for the
acquisition of Evans on 23 December 2020. The cash
payment of $9.6m for the acquisition of Navabi on 23
July 2021, was post FY21 year end and therefore not
reflected in the ending cash balance of $71.5m.
City Chic is well capitalised to deliver on its strong
organic growth pipeline and well positioned for future
value-adding inorganic opportunities that expand
the global customer base. Given the opportunities
to accelerate the growth of the business, as well
as the ongoing uncertainty caused by COVID-19
around the world, the Board decided not to declare
a dividend. The decision whether to pay a dividend
will be reviewed at the interim FY22 results. In view
of the opportunities, City Chic will remain focussed
on sensibly deploying capital to achieve its strategic
intent of gaining a strong global market position in a
sector that, at least for now, is under-served.
FY22 OUTLOOK
Australia has been impacted by temporary store
closures with 33% of trading days lost till the end of
August at a cost of $1 million a month in contribution.
However, stores which have been open and the
online channel, have to date delivered growth on
the prior corresponding period and total sales above
last year for ANZ. We are hoping vaccination levels
in Australia are such that stores will be open for the
critical run through Black Friday, Cyber Monday and
into Christmas.
Avenue and Evans are trading strongly above
pre-acquisition levels. Navabi is trading ahead of
expectations and above FY21 levels, although we
note the limited period since acquisition.
In September 2021, a number of marketplace
partnerships went live including Walmart (US) and
Ebay (AU) Marketplace integrations are underway
for Debenhams (UK), Very (UK), Zalando (Germany),
Amazon (UK), Target (US) and The Iconic (AU), which
are all expected to be live in 1H FY22. City Chic
has signed a partnership with David Jones for a
concession in 14 stores and their online marketplace
and has signed a franchise partnership for over 20
Debenhams stores in the Middle East.


store experiences and store environments
Further develop the World of Curves social
community
Pursue inorganic growth opportunities that add
economic value to the collective.
FY21 was a difficult but satisfying year for City
Chic. The Company and its people demonstrated
adaptability, innovation, strategic intent, operational
execution and resilience in a world beset with a virus
that prevented travel, limited social interaction and
impaired the ability to do business. We suspect the
effects of the virus will be ongoing for some time,
even after vaccination rates achieve the required
levels.
Nevertheless, we believe we can continue to grow
profitably, invest for the future and further progress
towards leading a world of curves. This would not be
possible without the wonderful City Chic Collective
team and the customers we serve. Our sincere thanks
for their extraordinary and ongoing support. It gives
us energy and makes us even more determined to
make this Company a global success.
Michael Kay
Chairman
Phil Ryan
CEO & Managing Director
In FY22 City Chic is focused on the execution of
various initiatives including:
• Drive market share growth and customer
acquisition in the US
• Gain market share in ANZ through the
introduction of our conservative value product
stream (Evans and Avenue)
• Introduce the collective’s full assortment to the
Evans customer base, building on the initial
deliveries in 2H FY21, to drive greater market
penetration
• Integrate Navabi and introduce the collective’s
brands to the customer base, as well as to further
develop the current product and lifestyle offering
• Expand and execute on marketplace partnerships
in all regions
• Rotate store portfolio into new fit-outs and
conversion to larger format stores; enhance in-
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
19
Annual Financial Report 2021 | Directors
Board of Directors
Chairman and Non-Executive Director
MICHAEL KAY
Non-Executive Director
MEGAN QUINN
Michael Kay joined the Board in October 2018 as an
independent non-executive director and was subsequently
appointed Chairman on 9 November 2018. Mr. Kay is a member
of the Audit and Risk Committee and member of the People,
Culture and Remuneration Committee.
Megan Quinn joined the Board in October 2012 as an
independent non-executive director. She is the Chair of the
People, Culture and Remuneration Committee and a member
of the Audit and Risk Committee.
Mr. Kay has significant listed company Board experience; he is
the Chairman of Omni Bridgeway, and was previously Chairman
of Lovisa. Mr. Kay has also held a number of senior executive
roles during his career including CEO of McMillan Shakespeare
and CEO of AAMI.
Ms. Quinn 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 was a co-founder of NET-A-PORTER and is a
non-executive director at Reece and InvoCare.
Non-Executive Director
MICHAEL HARDWICK
Chief Executive Officer and Managing Director
Michael Hardwick joined the Board in May 2012. Mr. Hardwick
is an independent non-executive director. Mr. Hardwick is also
the Chair of the Audit and Risk Committee and member of the
People, Culture and Remuneration Committee.
Phil Ryan was announced CEO of City Chic Collective in
September 2018 and joined the Board in February 2019 as an
executive director.
Mr. Hardwick is a Chartered Accountant, a member of the AICD
and currently a director and the CFO of the CottonOn Group.
Mr. Hardwick was previously a partner with the New Yorkbased private equity firm Hudson Valley Capital Partners and
has worked at PwC in both Melbourne and New York.
PHIL RYAN
Mr. 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 City Chic take a market leading
position in the global plus-size industry.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
21
Annual Financial Report 2021 | Directors
Board of Directors
Introducing in FY2022
The following new members have been appointed to the Board on 5 August 2021
Non-Executive Director (appointed after the reporting period)
NATALIE MCLEAN
Natalie McLean joined the Board in August 2021 as an
independent, non-executive director. She is a member of
the Audit and Risk Committee and a member of the People,
Culture and Remuneration Committee.
Ms. McLean has significant retail experience having worked
in senior positions domestically in Australia and internationally
with companies including Giordano, Rip Curl and the Cotton
On Group. Ms. 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 (appointed after the reporting period)
NEIL THOMPSON
Neil Thompson joined the Board in August 2021 as an
independent, non-executive director. He is a member of the Audit
and Risk Committee and a member of the People, Culture and
Remuneration Committee.
Mr. Thompson has significant financial, operational and strategic
experience from a broad range of senior roles and industries,
including in the freight and logistics, industrial products and
technology sectors. Mr. Thompson was previously Chief Financial
Officer of Ascender HCM (a payroll software and services
company), has worked at Alesco, Amatek, TNT and Elders IXL, and
is currently a director of the Australian World Orchestra.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
23
Annual Financial Report 2021 | City Chic Annual Recap
Annual Financial Report 2021 | 2022 Outlook
City Chic Annual Recap
2022 Outlook
Entry into the UK market with acquisition of Evans; integration complete
and growth strategy launched
Drive market share growth and customer acquisition in the US; execute
on the re-engagement strategy of the Avenue customer base
Implemented strategy to re-engage the Avenue customer base and drive
market share growth in the US
Gain market share in ANZ through the introduction of our conservative
value product stream (Evans and Avenue)
Expanded online offering including casual, basics and sleepwear. New
lifestyles developed and being trialled including Refinity, Arna York,
Societie+, Zim & Zoe and Aveology
Gain market share in the UK through the introduction of the collective’s
full assortment to the Evans customer base, building on the initial
deliveries in 2H FY21
Introduced greater assortment to all websites; additional City Chic
product on Avenue.com, and City Chic and Avenue product on
Evans.co.uk
Integration of Navabi and introduction of wider product range to the
European customer base
Enhanced store environments
Agreed acquisition of Navabi online marketplace (completed post year
end July 2021), marking entry into the European market.
Launched new marketplace partnerships with leading retailers in the UK,
USA and Canada and commenced wholesale partnership in the Middle
East as a channel to deliver our assortment to a new customer base
Expand and execute on marketplace partnerships in all regions
Continue rotation of store portfolio into new fit-outs & conversion to
larger format stores
Further develop the World of Curves social community
Continue to review inorganic opportunities to accelerate global
customer growth
Successfully navigated pandemic challenges; product mix adapted, stock
managed across global operations, overcame logistics challenges, and
ongoing store lockdowns
Published our first 2020 Modern Slavery Act Statement, achieved ‘Green’
rating in the COVID-19 Fashion Report, rolled out to worker surveys and
strengthened our cotton regions ban
Completed Equity Raise of $111m to support global growth opportunities
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
25
Annual Financial Report 2021 | Diversity
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.
These commitments also extend beyond
her. We are 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. 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.
1 in 4
Board members
is a woman
1 in 3
C-Suite leaders
is a woman
DIVERSITY SURVEY AND STRATEGY
In FY21 we conducted our first Diversity Survey and
achieved a Sense of Belonging Score of 76%which is
equal to the Culture Amp Global Inclusivity Benchmark.
Our goal is to ensure all gender identities and minority
group members have the same experience in the
workplace. The survey results identified the LGBTQI+
group (13% of workforce) and those that identify
as having a disability or impairment group (15% of
workforce) were areas of opportunity to improve. We
incorporated initiatives into our Culture and Connection
calendar that focused on awareness and inclusion for
these groups, we expanded our EAP offering to offer
specialist hotlines that target the specific support needs
of these groups and our FY22 volunteering program
aligns with NGOs that provide services to these groups.
Objectives established for achieving diversity and progress towards achieving them during the year ended
30 June 2021 are set out below:
FY2021 Diversity Strategy
OBJECTIVE
ACHIEVEMENT
Conduct a Diversity Survey for a new CCX baseline
Completed
Develop a FY21 Diversity Strategy underpinned by survey findings
Completed
Review Diversity Policy to ensure it aligns with Diversity Strategy
Completed
Develop and rollout a workplace volunteering program
FY22 Rollout
(due to pandemic)
Use FY20 WGEA Report to set gender-related diversity objectives for FY21
Completed
GENDER BALANCE AND STRATEGY
CCX has an ongoing commitment to reporting on
Diversity in line with the Workplace Gender Equality Act
2012 (WGE Act 2012). In FY21, the proportion of women
employed at different levels across CCX was as follows:
• 1 of 4 Board members is a woman;
• 1 in 3 C suite leaders is a woman (CEO, KMP and
Head of Business); 67% of the Leadership Team
(Other Executives and General Managers) are
women;
• 84% of our Managers (Senior Managers and Other
Managers) are women and;
• 97% of our workforce are women.
Following the end of the reporting period, two new
non-executive directors joined our Board. As at the date
of this Annual Report, 2 of 6 Board members (including
non-executive and executive directors) are women. In
FY21 we recognised the underrepresentation of males
in middle management and professional positions in
our support office. Those that identify as male had a
Sense of Belong Score of 95%. While this gives us
the confidence they felt valued in the workplace, we
wanted to increase gender diversity in these workforce
segments. Our FY21 objective was to increase male
headcount by 25% in these areas, and we overachieved
by increasing male headcount by 45%. We aim to see
male headcount increase in these workforce segments
FY2022 Diversity Strategy
OBJECTIVE
Seek to achieve and maintain gender diversity in the composition of the Board and the C-Suite
Leadership Team of no less than 30% of each gender.
Conduct CCX Annual Diversity Survey
Achieve a Sense of Belonging Score of 75% or above for all groups within the next two years.
Launch Diversity and Inclusivity Committee to lead diversity and inclusivity awareness, process
improvement, education, and initiatives.
Launch FY22 workplace volunteering program.
Reposition employment brand and recruitment activity to increase the attractiveness of the company
to males.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
27
Annual Financial Report 2021 | Corporate Social Responsibility
Corporate Social Responsibility
We believe that creating safe and respectful working environments for all workers in our
supply chain is the number one priority. Following the acquisition of new brands and with the
diversification of our sourcing regions, we have sought to partner with, and on-board, select new
factories and vendors into our supply chain and our ethical trade policies.
WE COMMIT TO SOURCE PRODUCT IN A
WORKING TOGETHER TO EMPOWER OUR
RECOGNISED, RESPONSIBLE, AND TRANSPARENT
WORKERS AND GIVE THEM A VOICE IN THE
SUPPLY CHAIN
SUPPLY CHAIN
We welcome the new opportunities and challenges that come with the growth of brands and the
diversification of our supply chain. Our goal is to work together with all our global partners for a
more positive impact to people and planet.
The UN predicts there are up to 45.8 million people
entrapped in slavery, with more slaves today than
in any other time in history. In 2018, the Australian
Government legislated the Modern Slavery Act, which
requires business to report on modern slavery risks in
their supply chain.
As part of our Worker Voice Program, we were
excited to launch our worker survey tool out to
factory workers as a pilot along side our factory
social audits.
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 try and ensure safe and fair working conditions for all
workers. We believe our ethical trade programme holds us to account when it comes to human
rights impacts associated with producing our products.
As we continue to broaden our sourcing regions and reach out to new countries to manufacture
our product, we have taken steps to strengthen our ethical trade policies. Regardless of location,
all suppliers are strictly required to implement and adhere to our high ethical sourcing standards.
Our FY2021 Highlights
1.
Published our first 2020 Modern Slavery Act Statement
2. Acheieved ‘Green’ rating in the Covid-19 Fashion Report
3.
Rolled out Worker Surveys – Top 24 factories
4.
Tracing of tier 2 & 3 suppliers in progress
This year we published our first Modern Slavery Act
Statement (for the prior reporting period) in which we
define the risks and highlight the steps we are taking
to help eradicate modern slavery in the supply chain.
We are committed to educating our business, and
suppliers, on modern slavery and providing practical
tools to identify and remediate issues.
We continue to act on key issues such as the known
forced labour risks associated with certain cotton
farming regions.
CCX is committing to take 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 survey is in addition to our worker hotline and
grievance mechanism as another channel to talk to
factory workers.
Phase 1: The survey was rolled out across 24
factories and touched 4300 workers to seek their
feedback across the following:
WORKER SURVEY SCORECARD
✓ Modern Day Slavery – 93% positive
✓ Labour Practices – 89% positive
✓ Health & Safety – 95% positive
✓ Worker Satisfaction – 89% positive
Enhancing our worker voice tools is a key initiative
to help support us in gaining a more direct line to
workers. 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.
5. Updated and strengthened our Cotton Region ban
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
29
Annual Financial Report 2021 | Corporate Social Responsibility
THE RIGHT OF EVERY WORKER IN OUR SUPPLY
WORKING WITH FACTORIES TO RECOGNIZE THAT
CHAIN TO ENJOY SAFE AND HEALTHY WORKING
A MINIMUM WAGE DOES NOT ALWAYS EQUAL A
CONDITIONS IN AN ENVIRONMENT WHERE THEY
WE CARE FOR THE ENVIRONMENT AND THE
RESPONDING TO COVID-19
LIVING WAGE
ARE NOT EXPLOITED
MANAGEMENT OF WASTE IN OUR SUPPLY CHAIN
“As we navigate through the global COVID-19
We partner with our factories to implement a plan to
work towards paying a living wage, so that workers
are on a path to earning an income that covers their
basic family living expenses which for many is higher
than what a minimum wage can afford.
Through our third-party auditors and our own team’s
factory visits, we check that working conditions are
clean and safe and workers are not performing any
unsafe work.
At source we ask vendors, as part of our code of
conduct, to manage their waste, water and energy in
a responsible manner.
pandemic, we continue to place great importance on
all our ethical trade policies and responsible sourcing
practices”
Our COVID-19 Fashion Commitment Scorecard:
This year CCX was rated as part of the COVID-19
Fashion Report published in October 2020
as GREEN, as evidence of actions in all areas
were covered as part of the COVID-19 Fashion
Commitments.
We believe these commitments are an extension
to the Human Rights and Ethical Trade policies we
already have in place, however, we know we still have
so much more to do, and we are always reviewing
our policies and how we should act and respond in
the future.
Despite the impacts of COVID-19, we continued
to engage and work closely with our factories to
ensure the workers in our supply chain were able
to keep working and to produce our product in safe
conditions.
Through our internal review process we train and
then ask the factories to establish a living wage
calculation.
We believe this empowers factory owners in
understanding what a living wage is made up of and
how the wages paid compare.
Following the acquisition of Avenue and along with
the diversification of sourcing regions, the focus has
been to embed selected new factories and vendors
into our supply chain and our ethical trade policies.
All new suppliers have been onboarded into our
ethical trade program and as we audit the factories,
we assign a risk rating to help prioritise factory
corrective actions required.
We also record progress of factories.
With the introduction of new factories and regions, we
know that there is a greater challenge for factories
to pay a living wage due to the wider gap that exists
when comparing back to the legal minimum wage.
We understand that not all factories will be at the
same stage in their ethical trade journey, however we
are committed to partnering with factories who also
are committed in coming on this journey with us.
We work with factories to help them develop a
roadmap to improving conditions by providing:
• Worker hotlines and Grievance Mechanisms
• Supporting factories to proactively adopt freedom
of association policy
• Promoting a gender equality policy
• To respect the rights of workers to collective
bargaining
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
As we widen our sourcing base, we will continue
to audit factories against local regulations and the
equivalent standards to the EIA in their locations.
MANAGING & REDUCING OUR FOOTPRINT
The efficient use of resources and minimising
negative impacts on the environment needs to be
part of our day to day thinking. We have started
this process by assessing areas of risk to help us
construct medium- and long-term strategies by
priority.
We have started working on the following key areas
which we believe can help us to have a more positive
impact:
• More sustainable packaging options,
• Sourcing more sustainable / preferred fibres that
can be used in our product
• Reviewing options to extend the life of garments
to work towards a more circular economy.
• Providing options to reduce micro plastics in our
oceans.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
31
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 27 June 2021.
Annual
Financial Report
2021
Directors
The following persons were directors of City Chic Collective Limited during the whole of the financial period and up
to the date of this report:
Michael Kay
Michael Hardwick
Megan Quinn
Phil Ryan
33
57
58
64
119
120
122
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report to the Members
of City Chic Collective Limited
The following persons were appointed as directors of City Chic Collective Limited after the financial period but prior
to the date of this report:
Neil Thompson (appointed 5 August 2021)
Natalie McLean (appointed 5 August 2021)
Company Secretary and Other Key Management Personnel
Marta Kielich (Company Secretary, appointed 7 July 2020)
Mark Ohlsson (Company Secretary, appointed 10 May 2019 and resigned 6 July 2020)
Annual Financial Statements
Corporate Governance Statement
Munraj Dhaliwal (Chief Financial Officer)
Principal activities
Shareholder Information
City Chic Collective is a global omni-channel retailer specialising in plus-size women’s apparel, footwear and
Corporate Directory
& Royal. City Chic and CCX appeal to fashion forward women and its omni-channel model comprises of a network of
accessories. It is a collective of customer-led brands including City Chic, Avenue, Evans, CCX, Hips & Curves and Fox
89 stores across Australia and New Zealand (ANZ) and websites operating in ANZ, the US and the UK. Avenue (USbased) and Evans (UK-based) target a broad customer base across conservative and fashion segments, both with a
long history and significant online customer following. Hips & Curves in the US, and Fox & Royal in ANZ and the UK
are online intimates brands. City Chic Collective owns European-based online marketplace Navabi (as outlined in the
matters subsequent to the end of the financial period section), and also sells its collective of brands through thirdparty marketplace and wholesale partners in the US, Canada, UK and Europe.
There was no significant change in the nature of the activities of the Group during the period.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
33
Annual Financial Report 2021 | Directors’ Report
Dividends
OTHER
There were no dividends paid, recommended or declared with respect to the current financial period.
as the Stalking Horse Bidder for the eCommerce assets of Catherines, which was subject to the completion of an
In the previous corresponding financial period (in September 2019), a final fully franked ordinary dividend of 1.5 cents
auction process. On 16 September 2020, that auction took place in the United States, and City Chic was not the
per ordinary share was paid for the 2019 financial year; the total amount paid was $2.9m.
highest bidder and therefore unsuccessful in the acquisition. Notwithstanding the strategic merits of the transaction,
On 24 July 2020, in combination with the equity raise, City Chic also informed the market that it had been nominated
the winning bid of US$40.8m (A$55.5m) was above City Chic’s assessment of the value of the assets.
Operating and financial review
During the reporting period, the Group repaid its $17.5m of debt in full, with the $40.0m available debt facility maturing
in February 2023.
The Group achieved revenue from continuing operations of $258.5m (28 June 2020: $194.5m), representing growth
of 32.9%. Net profit after tax for continuing operations was $21.6m (28 June 2020: $9.2m), representing growth of
135.3%.
FY22 Outlook
The Group ended the year with net cash of $71.5m at 27 June 2021 (28 June 2020: net cash of $3.9m). The cash
In the early part of FY22, City Chic is pleased to advise that the company has continued to deliver strong positive
balance includes the proceeds from the July-August 2020 equity raise net of payment for the acquisition of Evans,
top-line and comparable sales growth.
both as detailed below.

Australia has been impacted by temporary store closures, however stores which have been open and the online
channel have delivered growth on the prior corresponding period. There continues to be uncertainty relating to
The normalised operating cash flow generated for the year is $24.2m (28 June 2020: $20.9m).
the duration of the lockdowns in Australia and the aggregate impact on FY22
Normalisation adjustments of $9.1m include the reclassification of rental payments to financing cash flows in relation

Avenue continues to trade strongly, materially above pre-acquisition levels
to AASB 16, JobKeeper grant received relating to the prior year, repayment of deferred tax from the prior year, cash

Evans has rebounded strongly and is now trading above pre-acquisition levels
outflows relating to transaction costs incurred for the July-August 2020 equity raise as well as costs incurred for the

Navabi is trading ahead of expectations and above FY21 levels, although noting the limited period since
Evans acquisition, working capital adjustments and finalisation of income tax associated with the 2018 divestment
acquisition.
and cash outflows for building Evans’ working capital to commercial levels.
Heading into FY22, City Chic is focused on the strategy of delivering its significant product range to the global
The Underlying EBITDA from continuing operations post-AASB 16 was $50.2m (28 June 2020: $38.8m) and pre-
plus-size market through its global digital and physical storefronts. The strategy includes the execution of various
AASB 16 was $42.4m (28 June 2020: $26.5m). The Underlying EBIT from continuing operations post-AASB 16 was
initiatives:
$35.8m (28 June 2020: $21.3m) and pre-AASB 16 was $36.0m (28 June 2020: $20.7m). The Underlying NPAT from

Drive market share growth and customer acquisition in the US
continuing operations post-AASB 16 was $24.0m (28 June 2020: $13.7m) and pre-AASB 16 was $24.9m (28 June

Gain market share in ANZ through the introduction of our conservative value product stream (Evans and Avenue)
2020: $13.8m).

Introduce the collective’s full assortment to the Evans customer base, building on the initial deliveries in 2H FY21,
to drive greater market penetration
EQUITY RAISE

Integrate Navabi (as outlined in the matters subsequent to the end of the financial period section) and introduce
On 24 July 2020, City Chic completed a fully underwritten $80.0m Placement of new fully paid ordinary shares to
the collective’s brands to the customer base, as well as to further develop the current product and lifestyle
eligible institutional investors. The Placement was conducted at $3.05 per share, resulting in 26.2 million new shares
offering
being issued, representing 13.1% of City Chic’s existing issued capital. New shares issued under the Placement settled

Expand and execute on marketplace partnerships in all regions
on 30 July 2020 and commenced trading on 31 July 2020.

Rotate store portfolio into new fit-outs and conversion to larger format stores; enhance in-store experiences and
store environments
Following the completion of the Placement, City Chic offered all eligible shareholders the opportunity to participate

Further develop the World of Curves social community.
in a non-underwritten Share Purchase Plan (SPP). City Chic raised $31.1m through the SPP, which closed on 18 August
2020. The SPP was conducted at $3.05 per share, resulting in 10.2 million shares being issued. The Placement and
the SPP together raised $111.1m and resulted in 36.4 million new shares being issued.
EVANS ACQUISITION
On 23 December 2020, the Group completed the acquisition of the Evans brand, and the eCommerce and
wholesale businesses for £22.7m (A$40.2m) in cash. Evans is a UK-based retailer of women’s plus-size clothing with
a longstanding customer base and strong market position. The acquisition gives the Group an excellent foundation in
a new geography and is part of the Group’s strategy to expand the global customer base through the digital channel.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
35
Annual Financial Report 2021 | Directors’ Report
Material business risks
ENVIRONMENTAL CHANGES
The Group operates in an environment of change and uncertainty. There are a range of factors, both specific to the
The Group is exposed to risks arising from environmental changes, scarcity of natural resources and the
continuing global development of legislation and regulations in this area. Many of these risks are greatest
Group and general in nature which may impact the operating and financial performance of the Group. The impact of
in the Group’s supply chain activities and these activities and the related risks are largely managed through
these risks is regularly reviewed for their possible impact.
the principals laid out in the Corporate Social Responsibility report. The Group manages environmental
risks, such as droughts and floods by diversifying its vendors and material sourcing. The Group has
COVID-19 PANDEMIC
dedicated resources to ensure continued compliance across all regulatory requirements in the markets
The ongoing COVID-19 pandemic continues to have a significant impact on the global and Australian
operated in by the Group.
economy and the ability of businesses, individuals and governments to operate. Emergency powers and
restrictions have been enacted, which amongst other things, has restricted travel and the ability of many
individuals to leave their homes and travel to places of work.
A number of aspects of City Chic’s business may continue to be 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.
Management takes confidence in its ability to trade profitably during the height of the pandemic in 2020,
but continues to closely manage the ongoing uncertainty with lockdowns in Australia and supply chain
impacts globally. This is further supported by the strength of the Group’s business model, with high online
Significant changes in the state of affairs
COVID-19 PANDEMIC
During the reporting period, the pandemic has had a significant and broad impact across the Group’s global operations.
The health crisis and government-directed restrictions caused disruption to labour, logistics and consumer spending.
The timing of restrictions being eased and the recovery in mobility and activity has varied by region, but broadly ANZ
rebounded in late 2020, the US in early 2021 and the UK in mid-2021. Specific impacts of the pandemic on operations
include:

direction. Over the financial year, there were approximately 3,655 equivalent store days closed (over 10% of total
penetration and geographic diversity, and the flexibility of its supply chain, helping manage stock levels
equivalent store days in FY21) including 2,910 in Victoria, 177 in NSW, 176 in Queensland, 147 in Western Australia,
and production times. In addition, having significant liquidity headroom and a strong balance sheet gives
49 days in Northern Territory, 34 in South Australia, 12 in ACT, 7 in Tasmania and 143 in New Zealand. The Group
flexibility to continue operating the business, maintaining key relationships with suppliers and ensuring
also received $3.5m relating to JobKeeper subsidy in Australia for the first three months of the reporting period,
the right, long term strategic decisions are being made.
COMPETITION AND CONSUMER DISCRETIONARY SPENDING
which was paid in its entirety to team members

vaccine roll-out in early 2021, restrictions were eased which resulted in a rebound in consumer spending from
it services. The retail fashion market continues to consolidate and feel the effects of globalisation. City
supply chain that adapts to changes within customer buying patterns.
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 FY2021.
WORKPLACE HEALTH AND SAFETY (WHS)
The Group has over 640 employees as well as the customers who visit physical stores across ANZ. The
Group has a high focus on WHS with investment in training and development of its employees a high
priority.
Significant disruption to labour in US warehousing and fulfilment and large surcharges imposed by freight carriers,
in particular during peak seasonal trade in November 2020 to January 2021. Aligned with the acceleration of the
The Group operates in a retail environment where quality and value for money are critical to the customers
Chic is in a unique situation of having high online penetration, a global footprint and a nimble and fast
In FY21, the ANZ store network was impacted by several periods of closures in response to government
March 2021 onwards

At the time of the acquisition of Evans, the UK was in heavy government-imposed lockdowns. There has been an
impact on logistics and labour, but less severe than that experienced in the US in 1H FY21

Wholesale and marketplace business was largely paused throughout the period while partners addressed their
own challenges caused by the pandemic.
During the financial reporting period, the Directors continued to monitor COVID-19 related developments and worked
closely with management to assess and navigate through the potential implications for team members, suppliers,
customers and operations.
EVANS ACQUISITION
As noted in the Operating and Financial review section, on 23 December 2020, the Group completed the acquisition
of the Evans brand, and the eCommerce and wholesale businesses for £22.7m (A$40.2m) in cash. Evans is a UKbased retailer of women’s plus-size clothing with a longstanding customer base and strong market position. The
acquisition gives the Group an excellent foundation in a new geography and is part of the Group’s strategy to expand
the global customer base through the digital channel.
There were no other significant changes in the state of affairs of the consolidated entity during the financial period.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
37
Annual Financial Report 2021 | Directors’ Report
Matters subsequent to the end of the financial period
Information on directors
COVID-19 RELATED MATTERS
MICHAEL KAY
The COVID-19 pandemic continues to have an impact globally in the new financial period. The Directors continue
to monitor COVID-19 related developments and are closely working with management to assess and navigate
through the potential implications for team members, suppliers, customers, and operations. The focus is to maintain
production and supply of products and services whilst minimising the risk of spread of COVID-19 amongst our team
TITLE:
Chairman and non-executive director
QUALIFICATIONS:
B.LLB
EXPERIENCE AND EXPERTISE:
Michael Kay joined the City Chic Collective 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 Royal Automobile Club
Insurance (WA) and 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.
members, our customers, and the societies in which the Group operates.
Subsequent to the end of the financial year, the Australian store network was impacted by varying periods of
temporary closures in response to government direction on restrictions and lockdowns. During the first 8 weeks of
FY22, there were approximately 1,646 equivalent store days closed (c.33% of total equivalent store days over the
period) including 764 in NSW, 565 in Victoria, 178 in Queensland, 40 in Western Australia, 32 in South Australia, 20
in ACT, 7 in Northern Territory and 40 in New Zealand. Stores in NSW (18), Victoria (21), ACT (2) and New Zealand (8)
remain temporarily closed as of the date of this report. However, the Group continues to trade profitably with the
OTHER CURRENT DIRECTORSHIPS: Mr. Kay is currently Chairman of Omni Bridgeway Ltd (ASX: OBL) (formerly called IMF
benefit of the geographic and channel diversification. City Chic is well capitalised to deliver on its strong organic
growth pipeline and well positioned for future inorganic opportunities to expand the global customer base.
Betham Limited (ASX: IMF).
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mr. Kay was Chairman of Lovisa Holdings Limited (ASX:LOV) until his retirement on 30
October 2018 where he led the Board during a period of substantial growth. He was
previously Chairman and non-executive director of ApplyDirect Limited (ASX:AD1)
until 19 March 2019.
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:
700,000 ordinary shares
INTERESTS IN OPTIONS:
None
INTERESTS IN RIGHTS:
None
NAVABI ACQUISITION
On 23 July 2021, the Group signed and completed a share purchase agreement to acquire 100% of the shares in JPC
United GmbH (“Navabi’) for €6.0m (A$9.6m) in cash, from the co-founders of Navabi. Navabi’s assets include €2.1m of
cash net of tax liabilities, as well as inventory and immaterial other working capital. In 2009, Navabi was established
as an online marketplace selling hundreds of third-party women’s plus-size brands. Navabi has also developed its
own brands exclusively sold on the marketplace, which have grown to become the majority of sales in recent years.
Navabi’s loyal customer base are focused on size, fit and quality, and are based predominantly in Germany. Navabi’s
websites had 5.8m customer visits in 2020, generating €10.4m (A$16.6m) in sales revenue, and pre-pandemic traffic
exceeded 10m visits.
MICHAEL HARDWICK
No other matter or circumstance has arisen since 27 June 2021 that has significantly affected, or may significantly
TITLE:
Non-executive director
affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs
QUALIFICATIONS:
B.Comm
in future financial years.
EXPERIENCE AND EXPERTISE:
Michael Hardwick joined the City Chic Collective Limited Board in May 2012. He is
an independent, non-executive director. Mr. Hardwick is a director and the Chief
Financial Officer of the Cotton On Group, and a director of the Cotton On Foundation.
Mr. Hardwick is also a non-executive director of the Grill’d Group of Companies which
includes Australia’s largest privately-owned chain of Burger Restaurants and also
Koko Black, a premium branded Australian chocolatier.
Mr. Hardwick is a Chartered Accountant and member of the AICD. He spent 10 years
at PwC in both Melbourne and New York in the transaction advisory practice and
also spent 10 years as a partner with the New-York based private equity firm Hudson
Valley Capital Partners.
Likely developments and expected results of operations
Certain likely developments in the operations of the consolidated entity and the expected results of operations in
financial years subsequent to the period ended 27 June 2021 are referred to in the preceding operating and financial
review and outlook.
OTHER CURRENT DIRECTORSHIPS: Mr. Hardwick does not hold any other listed company directorships.
Environmental regulation
The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or
State law. The Group has dedicated resources to ensure continued compliance across all regulatory requirements in
the markets operated in by the Group.
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
Mr. Hardwick has not held any other listed company directorships in the last three
years.
SPECIAL RESPONSIBILITIES:
Chairman of the ARC; Member of the PCRC
INTERESTS IN SHARES:
504,836 ordinary shares
INTERESTS IN OPTIONS:
None
INTERESTS IN RIGHTS:
None
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
39
Annual Financial Report 2021 | Directors’ Report
MEGAN QUINN
NATALIE MCLEAN
TITLE:
Non-executive director
TITLE:
Non-executive director (appointed 5 August 2021)
QUALIFICATIONS:
GAICD
QUALIFICATIONS:
B.Bus
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.
EXPERIENCE AND EXPERTISE:
Natalie McLean joined the City Chic Collective Limited Board on xx 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, a director of the Cotton On
Foundation and is a board member of the Geelong Racing Club.
OTHER CURRENT DIRECTORSHIPS: Ms. Quinn is currently a non-executive director at Reece Limited (ASX:REH) and
InvoCare Limited (ASX:IVC).
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chair of the PCRC; Member of the ARC
INTERESTS IN SHARES:
None
INTERESTS IN OPTIONS:
None
INTERESTS IN RIGHTS:
None
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:
None
INTERESTS IN RIGHTS:
None
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, with a collective of customer-led brands including City
Chic, Avenue, Hips & Curves and Evans. Under Mr. Ryan’s leadership, CCX now has
more than 85 stores in Australia and New Zealand with online sales representing
more than 70% of total sales globally and in the US, UK and Europe, CCX trades
exclusively in a digital capacity. Mr. Ryan has driven successful partnerships with
Nordstrom, Macy’s, and Bloomingdale’s in the USA; ASOS in the UK, Alshaya in the
Middle East and Zalando in Germany. 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.
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 xx 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 was most recently Chief Financial Officer of Ascender HCM (a payroll
software and services company) and is a director of the Australian World Orchestra.
He has previously worked at Alesco, Amatek, TNT and Elders IXL.
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:
Member of the ARC; Member of the PCRC
INTERESTS IN SHARES:
1000 ordinary shares
INTERESTS IN OPTIONS:
None
INTERESTS IN RIGHTS:
None
OTHER CURRENT DIRECTORSHIPS: None
FORMER DIRECTORSHIPS
(LAST 3 YEARS):
None
SPECIAL RESPONSIBILITIES:
Chief Executive Officer; Managing Director
INTERESTS IN SHARES:
133,836 ordinary shares
INTERESTS IN OPTIONS:
2,161,235 ordinary shares issued under CCX’s 2019 Employee Share Plan and
escrow provisions
INTERESTS IN RIGHTS:
2,640,740 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.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
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Annual Financial Report 2021 | Directors’ Report
Company secretary
Marta Kielich joined City Chic as General Counsel and Company Secretary on 7 July 2020. 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.
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.
Meetings of directors
The remuneration report is set out under the following main headings:
The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during
(a) Introduction
the period ended 27 June 2021, and the number of meetings attended by each director were:
Full Board
Attended
PCRC
Held
Attended
ARC
Held
Attended
Held
Michael Kay
28
28
4
4
4
4
Michael Hardwick
28
28
4
4
4
4
Megan Quinn
28
28
4
4
4
4
Phil Ryan1
28
28
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.
Neil Thompson and Natalie McLean joined the Board after the end of the reporting period.
(b)
Remuneration strategy and policy
(c)
Remuneration framework
(d)
Remuneration outcomes for key management personnel
(e)
Service agreements
(f)
Disclosures relating to share options and performance rights
(g)
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.
Retirement, election and continuation in office of directors
At the 20 November 2020 Annual General Meeting (“AGM”), 99.88% of the votes received supported the re-election
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 27 June 2021 and 28 June 2020. The key management
personnel consisted of the following directors and senior executives of City Chic Collective Limited:
of director Megan Quinn as part of the company’s constitution that specifies all directors must stand for re-election
every three years.
Name
Role
Non-executive directors:
Michael Kay
Chairman and non-executive director
Michael Hardwick
Non-executive director
Megan Quinn
Non-executive director
Executive directors:
Phil Ryan
Chief Executive Officer and Managing Director
Other key management personnel:
Munraj Dhaliwal
1
Chief Financial Officer
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.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
43
Annual Financial Report 2021 | Directors’ Report
b. Remuneration strategy and policy
c. Remuneration framework
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.
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
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
PRINCIPLE 1
PRINCIPLE 2
PRINCIPLE 3
The objectives of the Group’s
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.
The reward framework is
designed to align executive
reward with the Company’s
interests. The Board have
considered that it should
seek to enhance the
Company’s interests by:
• including economic profit
as a core component of
plan design; and
• attracting and retaining
high calibre executives.
Alignment to program
participants’ interests:
• rewards capability and
experience
• reflects competitive
reward for profitable
growth; and
• provides a clear structure
for earning rewards.
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 aggregate non-executive directors’ remuneration be determined periodically 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.
Non-executive chairman and non-executive directors’ fees increased with effect from 1 April 2021 as reflected
below:
Role
Remuneration (per annum,
exclusive of superannuation)
$
Base fee for Non-Executive Chairman
240,000
Base fee for Non-Executive Director
120,000
Additional fee for Chair of the ARC
20,000
Additional fee for Chair of the PCRC
10,000
The increase followed a review of benchmarking data and considered a range of factors including the time
Remuneration policies are developed to provide market competitive remuneration arrangements that support the
commitment required, scale, complexity and growth of the business and was undertaken in conjunction with
attraction, engagement and retention of talented team members, and that are aligned with the Company’s interests.
the search for new non-executive directors in order to attract the appropriate calibre of candidates.
(ii) EXECUTIVE DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
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.
FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT
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Annual Financial Report 2021 | Directors’ Report
LTIP TRANCHES
Vesting conditions of the LTIP tranches are set out below.
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 27 June 2021, the PCRC determined that executives will not be eligible for the STI plan,
as their incentives would be solely in relation to the long term incentives, detailed below.
LONG-TERM INCENTIVES
Tranche 1
Vesting Condition 1
Continued service to 27 August 2021, with no holding lock on resulting shares;
Vesting Condition 2
Compound annual growth rate (CAGR) in the Group’s earnings per share before tax (EPS) during
the three years to June 2021 in accordance with the following schedule:
EPS CAGR across the Tranche 1
Proportion of Tranche 1 Performance Rights held that will
Performance Period
satisfy Vesting Condition 2
Below 5.0%
Nil
5.0%
25%
5.0% ≤ EPS CAGR ≤ 20.0%
Straight line pro-rata vesting between 25% and 100% (inclusive)
Tranche 2A
The Group’s long-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.
Vesting Condition
Continued service to 27 August 2021, with no holding lock on resulting shares.
Tranche 2B
LONG TERM INCENTIVES
The Group’s long-term incentives are comprised of the Long Term Incentive Plan (LTIP) and the Loan Funded Share
Plan (LFSP). The following share-based payment arrangements were in existence during the current year:
Tranche Grant Date
Performance
Share
Expected Dividend
period end
price at
volatility
yield %
date
grant date
%
1
2A
2B
2C
30/06/2021
30/06/2021
30/06/2021
30/06/2023
13/11/2018
13/11/2018
13/11/2018
13/11/2018
$1.17
$1.17
$1.17
$1.17
35.00%
35.00%
35.00%
35.00%
3.50%
3.50%
3.50%
3.50%
Risk-free
interest
rate %
Balance at
the start of
the period
2.12%
2.12%
2.12%
2.12%
781,848
1,237,500
1,237,500
2,475,000
5,731,848
Total Performance Rights
3
3
3
21/11/2019
03/03/2020
16/09/2020
30/06/2024
30/06/2024
30/06/2024
Total Loan Funded Shares
$2.68
$2.79
$3.33
35.00%
35.00%
35.00%
N/A
N/A
N/A
2.12%
2.12%
2.12%
Granted
Vesting Condition 1
Continued service to 27 August 2021, with no holding lock on resulting shares.
Vesting Condition 2
Group EPS performance in accordance with the following schedule:
Group EPS for the year to 30 June 2021
Proportion of Tranche 2B Performance Rights
held that will satisfy Vesting Condition 2
Vested
Expired/
forfeited
Balance at
the end of
the period



781,848
1,237,500
1,237,500
2,475,000



5,731,848
7,533,448
667,464

474,576


7,533,448
667,464
474,576
8,200,912
474,576


8,675,488
Below $0.0975 (1.3 x FY202018 EPS)
Nil
$0.0975 ≤ EPS < $0.1050 (1.4 x FY202018 EPS) 50% EPS ≥ $0.1050 100% Tranche 2C Vesting Condition 1 Continued service to August 2023, with no holding lock on resulting shares. Vesting Condition 2 Group EPS 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 FY202018 EPS) Nil $0.1250 ≤ EPS < $0.1200 (1.6 x FY202018 EPS) 50% $0.1200 ≤ EPS < $0.1275 (1.7 x FY202018 EPS) 75% EPS ≥ $0.1275 100% FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 47 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 • Total Company. The Company will apply the after-tax amount of any dividends payable in respect of a Participant's LF Shares There were no remuneration consultants engaged by the Group during the financial period, through the PCRC, to review existing remuneration policies for the current reporting period. Voting and comments made at the company's 20 November 2020 AGM At the 20 November 2020 AGM, 99.00% of the votes received supported the adoption of the remuneration report for the year ended 28 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. 38% 59% 1,400,127 105,075 78,689 1,471,565 285,458 38,547 21,694 399,632 1,114,669 66,528 21,694 700,354 17,729 8,890 8,682 - Use of remuneration consultants 1,471,565 management's expectation of future earnings and the financial hurdles for vesting. - amortised over the vesting period on a probability adjusted basis. The probability is assessed with consideration of Other key management personnel Munraj Dhaliwal 399,632 a Modified Binomial Lattice option pricing model which allows for varying exercise price. The resulting value is - The LF shares issued under the Plan have been treated as 'in substance options' which have been valued using 700,354 Straight-line pro rata vesting between 25% and 100% (inclusive) Executive directors Phil Ryan 12.5% ≤ EPS CAGR ≤ 20.0% 186,617 93,577 91,385 100% - 20% 186,617 93,577 91,385 25% $ 12.5% $ Proportion of Tranche 3 LF shares that will satisfy Vesting Condition 2 $ AEPS 3-year CAGR from 1 July 2019 2021 Non-executive directors Michael Kay Michael Hardwick Megan Quinn of Vesting Period Condition), the LF shares held will vest in accordance with the following scale: Other long-term leave benefits (A) $ $ by the Board over the 3 year period commencing on 1 July 2019, in which case (subject to satisfaction Post-employment superannuation Compound annual growth rate (CAGR) in the Group's earnings per share after tax (AEPS) prescribed Total short-term Vesting Condition 2 AMOUNTS OF REMUNERATION Continued service to 30 June 2024. (a) Payments and benefits Vesting Condition 1 d. Remuneration outcomes for key management personnel Tranche 3 Allowances Vesting conditions of the LF Shares are set out below: Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables. forfeited and bought back by the Company at the issue price and the Loan will be deemed repaid. Share-based payments (B) $ The LF Shares offered are subject to Vesting Conditions, which if not met, the unvested LF Shares will be Cash salary & fees • - towards repayment of the outstanding balance of the Loan. calculated at each reporting date less amounts already recognised in previous periods. month grace periods may be applied) or 7 years from the agreement by the Board to issue LF Shares under the 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 The Loan has an interest payable of 1.9% and is repayable on the earlier of cessation of employment (6 or 12 (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 • (A) In accordance with AASB 119 Employee Benefits, accrued annual leave and long service leave is classified as other long-term employee benefit. The Company advances money to pay for the subscription price of the LF Shares (Loan). 3,055,456 • 745,331 Loan Funded ("LF") shares are issued at the Company's share price on the ASX at the time of issue. 1,903,245 • Proportion of performance related remuneration The key terms of the LFSP are listed as follows: 204,346 102,467 100,067 % LFSP TRANCHE 0% 0% 0% Annual Financial Report 2021 | Directors' Report FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 49 N/A N/A 2020 Remuneration and other terms of employment for key management personnel are formalised in service agreements. N/A N/A Details of these agreements are as follows: 2021 Cash bonus forfeited e. Service agreements Phil Ryan Title: Chief Executive Officer and Managing Director Term of agreement: None Details: • Notice period of 6 months • Remuneration review at board discretion • Eligible for short- N/A N/A 2020 N/A N/A Title: Chief Financial Officer Term of agreement: None Details: • Notice period of 3 months • Remuneration review period every 12 months • Eligible for short-term incentives • Eligible for long-term incentives • No severance period • No 45% 62% termination benefits (except for statutory entitlements) • No other benefits 2020 All non-executive directors stand for re-election at least every 3 years and have no notice period, no 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. At risk - LTI 46% N/A N/A f. Disclosures relating to share options and performance rights N/A 2021 There were no options issued to key management personnel as part of compensation during the period ended 27 There were no performance rights issued to key management personnel as part of compensation during the periods 55% 38% ended 28 June 2020 and 27 June 2021. There were no loan funded shares issued to key management personnel as part of compensation during the periods ended 27 June 2021. The number of loan funded shares issued as part of the Company's 2019 Employee Share Plan Executive director: Phil Ryan 2021 Other key management personnel: Munraj Dhaliwal 54% to key management personnel as part of compensation during the period ended 28 June 2020 is set out below: 37% 2020 ISSUE OF SHARE OPTIONS AND PERFORMANCE RIGHTS June 2021. N/A 2020 2021 63% Key management personnel have no entitlement to termination payments in the event of removal for misconduct. Name At risk - STI benefits (except for statutory entitlements) • No other benefits Munraj Dhaliwal 2021 Cash bonus paid/payable term incentives • Eligible for long-term incentives • No severance period • No termination Fixed Remuneration 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: at each reporting period date less amounts already recognised in previous periods. (A) This comprises car and travel allowances. 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 2,876,570 1,314,982 90,834 69,741 1,401,014 1,390,214 399,231 Other key management personnel Munraj Dhaliwal (B) In accordance with AASB 119 Employee Benefits, accrued annual leave and long service leave is classified as other long-term employee benefit. 4,500 10,800 403,731 705,339 6,300 699,039 Executive directors Phil Ryan (C) 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 38% 733,413 277,829 1,823,478 1,037,153 59,984 30,850 21,003 14,307 6,714 6,714 2020 Non-executive directors Michael Kay Michael Hardwick Megan Quinn $ 150,598 70,673 70,673 $ - $ 150,598 70,673 70,673 $ 21,003 - Share-based payments (C) $ Other long-term leave benefits (B) Post employment Superannuation Total short-term Allowances (A) Cash salary & fees 57% 0% 0% 0% 164,905 77,387 77,387 $ $ Total Proportion of performance related remuneration Annual Financial Report 2021 | Directors' Report LOAN FUNDED SHARES Granted during the period Name Phil Ryan Munraj Dhaliwal Total 2021 2020 - 2,161,235 1,234,991 3,396,226 Vested during the period 2021 2020 - FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT - 51 Annual Financial Report 2021 | Directors' Report The number of performance rights over ordinary shares and loan funded shares held by key management personnel PERFORMANCE RIGHTS HOLDING as at 27 June 2021 are shown below: 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 Performance rights Tranche Name 1 2A 2B Phil Ryan Munraj Dhaliwal Total 240,740 133,333 374,073 600,000 87,500 687,500 600,000 87,500 687,500 Loan funded shares 2C 1,200,000 175,000 1,375,000 Total related parties, is set out below: 3 2,640,740 483,333 3,124,073 Balance at the start of the period 2,161,235 1,234,991 3,396,226 Phil Ryan Munraj Dhaliwal Total Granted 2,640,740 483,333 3,124,073 - Balance at the end of the period Expired/ forfeited Vested - - 2,640,740 483,333 3,124,073 ADDITIONAL INFOMATION The following earnings information reflects the basis for which financial hurdles are considered for the share-based payments and measure executive performance in delivering long term growth of the Group: Profit before income tax for continuing underlying operations EPS (underlying before income tax) - Tranche 1 Profit before income tax for continuing underlying operations LOAN FUNDED SHAREHOLDING The number of loan funded shares in the company held during the financial period by each director and other 2021 2020 2019 2018 $35.6m $20.1m $21.3m $14.4m 15.8 cents 10.5 cents 11.1 cents 7.5 cents $38.8m $22.9m $22.4m 17.3 cents 11.9 cents 11.6 cents Profit after income tax for continuing underlying operations $24.9m $11.6m $15.7m EPS (underlying after income tax) - Tranche 3 11.1 cents 7.2 cents 8.2 cents 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 Phil Ryan Munraj Dhaliwal Total (before share-based payments) EPS (underlying before income tax and share-based payments) - Tranches 2B and 2C 2,161,235 1,234,991 3,396,226 Granted - Balance at the end of the period Expired/ forfeited Vested - - 2,161,235 1,234,991 3,396,226 Other transactions with key management personnel and their related parties The following transactions occurred with key management personnel and their personally related parties: Consolidated g. Additional disclosures relating to key management personnel Payment for other expenses: Services provided by Southern Cross Shopfitting, a company that is associated with the Cotton on Group, of which Michael Hardwick is a Director and the CFO2 Services provided by International Southern Cross Shopfitting (NZ), a company that is associated with the Cotton On Group, of which Michael Hardwick is a Director and the CFO3 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 Received Balance at the start of the as part of Net Additions end of period renumeration the period Directors Michael Kay Michael Hardwick Phil Ryan 609,914 495,000 124,000 - 90,086 9,836 9,836 700,000 504,836 133,836 Other key management personnel Munraj Dhaliwal 80,000 - 19,672 99,672 1,308,914 - 129,430 1,438,344 Total Total related party transactions 2021 $'000 2020 $'000 2,356,173 2,552,160 9,360 67,386 2,365,533 2,619,546 All transactions were made on normal commercial terms and conditions and at market rates. 2 Michael Hardwick was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group. 3 Michael Hardwick was not involved in the decision making relating to International Southern Cross Shopfitting (NZ) and its dealings with the Group. FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 53 Annual Financial Report 2021 | Directors' Report Shares under option RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES The following balances are outstanding at the reporting date in relation to transactions with related parties: There were no unissued ordinary shares of City Chic Collective Limited under option outstanding at the date of this report. Consolidated 2021 $'000 Current payables Trade payables to Southern Cross Shopfitting, a company that is associated with the Cotton Group, of which Michael Hardwick is a Director and the CFO2 841,580 2020 $'000 - 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. 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 27 June 2021 and up to the date of this report. This concludes the remuneration report, which has been audited. Shares issued on the exercise of performance rights There were no ordinary shares of City Chic Collective Limited issued on the exercise of performance rights during the period ended 27 June 2021 and up to the date of this report. 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 The company has not, during or since the end of the financial period, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor. During the financial period, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. 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. 2 Michael Hardwick was not involved in the decision making relating to Southern Cross Shopfitting and its dealings with the Group. FY2021 CITY CHIC COLLECTIVE ANNUAL REPORT 55 Annual Financial Report 2021 | Directors' Report Non-audit services Deloitte Touche Tohmatsu ABN 74 490 121 060 Eclipse Tower 60 Station Street Parramatta Sydney, NSW, 2150 Australia Details of the amounts paid or payable to the auditor for non-audit services provided during the financial period by the auditor are outlined in Note 27 to the financial statements. 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 Phone: +61 2 9840 7000 www.deloitte.com.au imposed by the Corporations Act 2001. Officers of the company who are former partners of Deloitte Touche Tohmatsu There are no officers of the company who are former partners of Deloitte Touche Tohmatsu. The Board of Directors City Chic Collective limited 151-163 Wyndham Street Alexandria, NSW 2015 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. 26 August 2021 Dear Board Members Auditor’s Independence Declarat ion t o City Chic Collect ive Limit ed Auditor's independence declaration In accordance with section 307Cof the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of City Chic Collective Limited and its subsidiaries. A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set As lead audit partner for the audit of the financial report of report City Chic Collective Limited and the entities it controlled for the 52 week period ended 27 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: out immediately after this directors' report. (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and Auditor's independence declaration (ii) any applicable code of professional conduct in relation to the audit. Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001. Yours faithfully This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. DELOITTE TOUCHE TOHMATSU On behalf of the directors Annalisa Amiradakis Partner Chartered Accountants MICHAEL KAY PHIL RYAN Chairman Chief Executive Officer and Managing Director 26 August 2021 Liability limited by a scheme approved under Professional Standards Legislation. Sydney Member of Deloitte Asia Pacific Limited and the Deloitte organisation. 23 57 Deloitte Touche Tohmatsu ABN 74 490 121 060 Eclipse Tower 60 Station Street Parramatta Sydney, NSW, 2150 Australia Key Audit Matter Phone: +61 2 9840 7000 www.deloitte.com.au Evans Acquisition On 23 December 2020, the Group completed the acquisition of the Evans brand, and the ecommerce and wholesale businesses ("Evans Assets") for cash consideration of £23.1m (A$40.2m) in cash. Independent Auditor’s Report to the Members of City Chic Collective Limited Report on the Audit of the Financial Report Opinion We have audited the financial report City Chic Collective Limited (the "Company") and the entities it controlled (the "Group") which comprises the consolidated statement of financial position as at 27 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the 52 week period then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 27 June 2021 and of its financial performance for the 52 week period then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for 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) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. During the 52-week period ending 27 June 2021, the accounting for the acquisition of Evans assets was finalised. In accordance with Australian Accounting Standards the assets and liabilities of the acquired business are initially recognised at fair value. The fair value of the net assets acquired is $17.1m with a residual goodwill balance identified of $23.1m. Accounting for the acquisition of a business includes the determination of whether the transaction is the acquisition of a business or the acquisition of assets in accordance with AASB 3 Business Combinations as the accounting consequences are different. Identifying and determining the fair value of acquired assets, particularly intangible assets, can be complex and involves the significant use of assumptions. In finalising the accounting for the business combination, management engaged an external valuation expert to assist. Management’s accounting for the acquisition included: • Determining that the transaction is the acquisition of a business. • Identification of all assets acquired, and liabilities assumed. • Appropriate measurement at fair value of the assets acquired, and liabilities assumed at acquisition. • The appropriate recognition of deferred tax consequences relating to the assets acquired and liabilities assumed. • The expensing of transaction costs associated with the business combination. How the scope of our audit responded to the Key Audit Matter Our procedures included, but were not limited to: • • • • • • • • • Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. • Reading the Purchase Agreement to understand the terms and conditions of the transaction and identify the date that CCX acquired control of Evans. Evaluating management's assessment that the acquisition should be accounted for as the acquisition of a business in accordance with the requirements of the accounting standards. Assessing the completeness of the assets acquired and liabilities a...

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