City Chic wins $25m Avenue asset auction
City Chic has opened its chequebook, paying almost $25 million for a bankrupt US brand's assets at auction as it plots further American expansion.
The Australian plus-size clothing retailer on Friday announced itself as the winning bidder as Avenue's e-commerce assets went under the hammer in the United States.
The ASX-listed company upped its "stalking horse" bid from $10 million ($A14.8 million) to $16.5 million ($A24.4 million) to trump rivals and secure Avenue's well-established customer database and inventory.
The news sent City Chic shares rocketing up 12 per cent at $2.80 by 1410 AEST after the retailer had earlier been placed in a trading halt pending the auction result.
Shares in the company have now more than doubled over the past 12 months, up from $1.37 at the same time last year.
Avenue, a like-for-like specialty retailer for plus-size women, filed for bankruptcy in August and is shutting down its brick-and-mortar store network.
City Chic will fund the transaction with a combination of existing cash and credit loans, with completion of the deal expected in mid-October subject to approval from the US Bankruptcy Court.
With 104 stores in Australia and New Zealand, City Chic already has a US footprint - operating a website in the region and maintaining partnerships with Macys and Nordstorm.
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