City Chic Collective said it has the option to exit the US market should the Trump administration’s tariff situation become unviable for its business.
“Should these conditions continue over the medium to long term, the group has commenced discussions with its suppliers to further mitigate the impact of the increased tariffs,” the company said.
“Due to restructuring of the business and the variable nature of the cost base, the group has the option to exit the USA with minimal cost if the tariff situation remains uncommercial.”
The company noted that about 20 per cent of its revenue is generated in the US and over 90 per cent of its products are sourced from China.
As a preparation, it already brought a significant portion of its summer and winter ranges into the US ahead of tariff changes, ensuring it has sufficient inventory to sustain operations through the second quarter of fiscal 2026.
The group is also actively working with suppliers to manage the existing order pipeline and has temporarily paused all additional stock shipments to the US market.
Moreover, marketing spending has been scaled back to baseline levels.
Due to the evolving tariff situation, City Chic Collective is now targeting the lower end of its FY25 guidance of between $137 million and $147 million and EBITDA of between $8 million and $12 million.
“While management will use the low end of this range as its target for the remainder of the financial year, the current volatility and uncertainty puts this result at risk and results could fall short of this target,” the company said.
However, the business expects to maintain a neutral contribution margin in the short term, thanks to its predominantly variable cost structure and an additional $1.5 million in fixed cost reductions.
In a trading update, City Chic Collective said it witnessed year-over-year growth of 8 per cent in the first 18 weeks of the second half of FY25, with its ANZ segment rising 17 per cent and its US business declining 13 per cent.
The group’s online traffic surged 23 per cent.