I notice the time, so, good morning, ladies and gentlemen, and welcome to the City Chic Collective Limited Annual General Meeting for 2023. My name is Michael Kay, and I'm the chairman of City Chic. For those who have not been able to join us, the meeting is being recorded. The webcast is available to watch live and will be accessible after the meeting concludes by following the link on our investor relations website. I note there is a quorum present, and I declare the meeting open. I'd like to introduce first the directors and other officers of the company. Phil Ryan, on my left, the company's Managing Director and Chief Executive Officer, and next to him, the Independent Non-executive Directors, Megan Quinn, Natalie McLean, and Neil Thompson. Peter McClelland, our Chief Financial Officer, and Jackie Shanahan, our Company Secretary, are also with us today.
We also have with us today Yvonne Barnikel , representing the company's auditors, EY, who will be prepared to answer any questions about the conduct of the audit, and representatives of Link Market Services Limited, our share registrar, who are acting also as returning officer for the purposes of the meeting. Now, before moving to the formal business of the meeting, I'm going to take the opportunity to give you a brief overview of the 2023 year, and I'll then invite CEO and Managing Director, Phil Ryan, to provide more detail on the operational performance in FY 2023, an update on trade for the year to date, and plans for the future and the outlook for the year ahead. I'll now deliver my address. I want to begin by acknowledging that the past 18 months have been a very challenging period for City Chic and its shareholders.
The performance of the business and the share price are clearly utterly unacceptable, and I note this is reflected in the voting on the remuneration report. As shareholders will know, inflationary conditions and the resulting interest rate rises have materially impacted our customer demographic. She is battling high mortgage repayments and skyrocketing food, fuel, and electricity prices. We've seen demand impacted and customer price sensitivity beyond anything our business has seen before, including during the global financial crisis. Shareholders may have noticed a recent article in The Australian Financial Review, which pointed out that the Australian disposable income has moved negatively at a greater rate than any other developed economy over the past year, and U.S., has likewise moved negatively. These are challenging times for retail businesses.
As has been well documented, we bought additional inventory to protect us from the supply chain disruption and inflation caused by COVID-19, at a time when City Chic was recording record sales. We thought this was the right risk-adjusted decision. Of course, in hindsight, with the inflation of basic household items persisting well beyond what most experts were then predicting, this has proved to be the wrong decision. The past year has seen us, as shareholders know, unwinding the inventory through promotion and margin contraction. In accepting accountability for the business performance and the resulting share price, last February, the board volunteered a 20% reduction in fees, and today, in acknowledgement of the ongoing weakness in the performance and share price, all board members are reducing their fees by a further 20%.
So having dealt with the current difficult economic environment and the last 18 months of underperformance, I now want to focus on the future. I'm pleased to say the future does look a lot brighter for City Chic, and I'd like to touch on a few key points. First, we all but completed the right sizing of the inventory in the first quarter of this financial year, and inventory is now at levels that reflect demand. Phil will provide details in his presentation. I'm pleased to say we are now ready to move the business back to profitability, and we expect this to occur during the second half of the financial year. In August, we announced the results of a strategic review we undertook and the actions being taken to reshape the business to fit with and trade successfully in the current global economic environment.
Shareholders may recall the key actions were, firstly, the sale of the U.K. business to focus on the opportunities in Australia and the USA. It's worth reminding ourselves that City Chic has been trading successfully in Australia for 18 years and the United States for 13 years. The second key action was to refocus on what has been the hallmark of City Chic's success for two decades, namely, intimate knowledge of the plus-size market and customer, and through this, creating an emotional connection with her. Many retailers, as you well know, offer size-inclusive apparel, but it is limited in range, quality, and fit. City Chic focuses exclusively on the plus-size customer, and Phil will talk to this in more detail, and in particular, the focus now on higher value, higher margin products and customers.
The third key initiative was to simplify the business model and to drive down the cost base to enable us to trade through the current difficult conditions. We've made good progress on all these initiatives. Again, Phil will provide the detail, but I'm pleased to report the following: First, with the right sizing of inventory, we now have considerably more newness in stores and online. These products are selling through well and at good margin. She hasn't left us. Our brands are still strong. She's still buying, but with less free cash, she's more selective.... Secondly, the cost savings that we announced are in excess of what we suggested they would be in August. Headcount savings are running AUD 3 million better than the AUD 6 million plan.
Annualized logistics costs have been reduced by AUD 7 million through warehouse consolidation, and additional annualized savings have been renegotiated with suppliers to assist us achieve our target of fulfillment costs at 19% of revenue. We've also achieved additional operating cost savings of AUD 2 million. In the circumstances, I think these are considerable achievements and put us firmly back on the path to profitability. Now, that said, with geopolitical risks adding to economic uncertainty and continuing pressure on households in our demographic, we believe we have to continue to monitor demand, sales, and margin very closely in the traditionally strong period through to Christmas, and I can assure shareholders that we are committed to taking whatever steps are necessary to ensure our business model remains sustainable, and that we have a cost base which is appropriate for the revenue that we are able to generate.
In the meantime, our balance sheet continues to have the capacity to fund the business without the need for additional debt or other funding, and we continue to enjoy the support of our bankers. In the current circumstances, no dividend was declared, but of course, as the business performance and our capital position improve, this will be reviewed. Phil will provide you with an update on trading and outlook, and as shareholders will know, we're entering the busiest trading months of the year. These will give us a good read on our renewed product and customer strategy, and I can tell you that the signs are positive thus far, with sales and margin in the second half of October and for the first three weeks of November, tracking ahead of where we thought we needed to be.
Now, I want to acknowledge the determination and unflagging efforts of the City Chic team. After many years of ongoing success, it's been very difficult to accept the failures of the past 18 months. That notwithstanding, the team did not stop striving throughout our annus horribilis, and has taken some hard decisions in resetting the business to survive and prosper in challenging times. I also want to acknowledge the efforts of my colleagues on the board. The board met 25 times through the financial year and had an additional eight committee meetings, and the board and committees have already met 17 times this financial year. Additionally, there have been many informal meetings with the management team as directors rolled their sleeves up and assisted where they could in the reconfiguration of the business.
Finally, I want to acknowledge you, our shareholders, who have borne the brunt of the past 18 months. As I mentioned in opening, our performance and that of the share price are unacceptable. I hope I've demonstrated that we have taken responsibility for the situation, and we've taken active steps to right the ship and restore City Chic to its rightful place in the retail sector. In summary, it's early days in our recovery, but revenue and margin are improving and costs are under control. We will continue to report, of course, to shareholders through the course of the year on our progress, and it is now my pleasure to introduce our CEO, Phil Ryan, to present his review of FY 2023.
Thank you, Michael, and welcome, ladies and gentlemen, to our 2023 AGM. FY 2023 was a year of consolidation for City Chic. Our focus was on right-sizing the inventory and bringing the business back to a positive cash position in what was a very challenging environment. We've done that successfully, albeit at the cost of profitability. We undertook a strategic review focused on our online and international businesses to assist the best way to return to profitable trading. This was a thorough process and confirmed two key points. Firstly, that the opportunity in Australia and the USA is substantial, and that we will optimize returns by focusing our efforts on these markets. This led to the divestment of our European business.
Secondly, we need to get back to what made us great by focusing on three key areas of our business: our customer, our product, and our operating model. In the past, we've prided ourselves on the emotional connection that we have with our customers, and this was key to driving customer loyalty. We are returning to this by reinvigorating our ranges and listening to her through our multiple touchpoints. We've already simplified our business model and are further driving down costs to rightsize the operation so that we can be agile for all demand scenarios and through economic cycles. This is an ongoing process, and as Michael said, we are committed to taking whatever steps are necessary to ensure that our business model remains sustainable and that we have a cost base that is appropriate for the revenue we generate.
As disclosed to the market, we made the decision to accelerate the inventory sell-down in the first quarter of FY 2024 to ensure that we had the relevant products in our core markets ready for the key trading periods. As a result, the first 20 weeks of FY 2024 has been a further period of transition as we navigate what remains a volatile market and implement our strategic initiatives, especially in the USA, and this will set us up for profitability in the second half. Revenue was down 15.8% in FY 2023, excluding the 53rd week of trading. However, it was up 7% on FY 2021, outlining the strong performance in FY 2022. The underlying EBITDA loss of AUD 24 million includes AUD 22.3 million in inventory provisions and write-downs....
While I'm not going to dwell on FY 2023, I do recognize that the performance of the business was clearly unacceptable, and the shareholders can expect a significant improvement over the course of FY 2024 and beyond. FY 2023 was a year of balance sheet action that delivered a more commercial inventory level at AUD 53.8 million, well ahead of our target of AUD 100 million. With the inventory release, we delivered a cash balance of AUD 10.9 million, with strong operating cash flows of AUD 29.8 million for the total business. Accordingly, we adjusted our banking facility with new liquidity-based covenants in line with the business needs. Customer numbers at the year-end were around the 1 million mark, with Australia gaining 4%. However, average spend was down, reflecting how she felt in the softer economic conditions. Importantly, as Michael said, she has not left us.
She just pulled back her spend, and this trend has continued into FY 2024. In the USA, we saw a decrease in our customer numbers. However, the increase in spend was maintained as we kept our core customer. With that, I'll move on to the work we've done around the strategic review and the outcomes, which will steer us back to a profitable second half this year. The strategic review confirmed that there is a large addressable market in Plus, and that it is growing. The US is now a $54 billion market, and it has strong future growth prospects. Within that, the channel we play, the online market, is worth $6 billion. This is projected to grow at 7.2% annually.
The Australian market, where we are the major player at around 20% market share, is expected to double by 2030, so there's a lot of runway for us to grow. The review also found, and very importantly, that specialized plus-size apparel retailers, in order to be successful, need to offer fit and styling and expertise for her body, and this is something that has always been our strength. The strategic review involved extensive market research. The results of this process delivered a path that I know we can execute on. We need to be an agile, better-dressing business, focusing on City Chic lifestyle and price point products and driving an emotional connection to her, adding into our mix an elevated casual lifestyle extensions from all of our product learnings, especially from Avenue. We also need to simplify our business and reduce our operating costs.
The return to profitable growth is underpinned by three pillars, each with measurable targets. The first is to amplify our emotional connection with her. We've always put her first, but with the focus on clearing inventory, we put the needs of the business above her needs, and we've now returned to focusing on her. I know we can turn it around even further with good new product. We've known her for years and really understand who this customer is and how to talk to her. We need to continue to listen to her and anticipate her evolving needs in fit and styling. We're targeting our core customer, who is already 45% of our base, and our market research tells us that she has attractive customer economics with a higher average order value and a higher sell price.
In October, 65% of our new customers fit into this mold, which shows that if, as we shift our product mix, we'll build on this base. In the U.S., we're transitioning our customer base and have moved on a lot of our low-value, one-time customers that shopped in FY 2022. We're confident of getting back to our core customers as we shift the product mix through the second half. Our key metric of average order value has shown strong improvements in October and November, up 10% on last year in the prior corresponding period. The second pillar is to revitalize our range and deliver product that delights her, focusing on high-value product. I want to be clear, this doesn't mean raising prices.
What this means is shifting our mix away from low-value categories, such as sleepwear, and into more higher value categories, such as dresses, and then shifting the dress assortment to more affordable styling to align with economic conditions and get more of her wallet. We're simplifying our range to be around 3,000-4,000 products from 8,000+ that we were, and I'll talk to and they will talk to the higher value City Chic lifestyle that I outlined earlier. In Australia, this has historically been our strategy and is completed now in our stores, with online requiring some more assortment reshaping through the second half. It is more of a change in the USA.
However, almost half of our sales in the U.S. are with City Chic product, and half of our Avenue website customers have already purchased a City Chic garment or something of that ilk. And also, with all of our partners, City Chic is a lion's share of demand. This outlines the historical success we've had with this strategy. We are creating products that increase sell price and deliver a better margin, with our target to get to 60% and to be on three stock turns, excluding stock in transit. We are starting to see margin improvements as planned into October and November. In this slide, I'm trying to bring the assortment changes to life.
In the first box, it shows classic City Chic product, stuff that's driven our success for many years and stuff we know she wants from us and resonates with her through both the U.S. and Australia. The second, I'm trying to outline the targeted addition in our casual lifestyles that we've seen from the learnings in Avenue and are also working very well in our Australian business. This is a more elevated casual lifestyle with a greater trend focus that makes her feel good, not just clothe her, and this drives the connection. And if you go to our stores at the moment, you'll see walls where we've brought this to life really well.
You can see in the third box in red, where we're cutting the range and how we drove the customer to a functional purchase that was in high demand during the pandemic, especially in the US. We've achieved the rationalization of this product in Australia, and the U.S. will complete through the second quarter. The third pillar is to simplify the business and reduce costs, and in this area, we've achieved a lot already. With the exit of EMEA, we've materially simplified the operating model. We've streamlined our supply chain, reducing from seven origins to three. We've gone from 101 Tier 1 factories to 61. And we expect more in the next 12 months in our factory consolidation. We've gone from 12 global warehouses down to two, and we're also trading in three countries.
From this simplification, we will drive back the agility. We are back to a culture of cost containment, where our key focus is delivering quality garment at a great price through having an efficient business model that can drive lower prices and costs to increase margin. We have a focused fulfillment strategy and have already delivered a 20% fulfillment in FY 2023 and are targeting 19% in FY 2024 and beyond. At the results in August, we said that including the fulfillment reduction, we would target an annualized AUD 15 million cost saving. We announced AUD 6 million in our annualized savings to wages. As Michael stated earlier, we've already implemented and achieved a further AUD 3 million in annualized savings. This takes our total savings achieved to AUD 18 million on an annualized basis.
Since the results in August, we've also renegotiated the major warehouse contracts to align with our current demand. This will save over AUD 8 million annually in our fixed costs and allow us to continually achieve the 19% target, whatever demand shows, and even in the reduced demand scenarios. These savings phase in over the next 10 months. We'll also manage our marketing spend to 7% of sales. This is our path back to profitability and provides a platform from which we have successfully run our business for many years. This is an ongoing strategy on our costs, and we will do whatever is required to adjust our operating model with demand. We have taken the actions necessary to ensure the future success of the company. Moving to the trade update.
In August, we said that we were using the first quarter to accelerate the clean down of inventory, and this would impact the first quarter's revenue and margin. The inventory is clean in Australia, and while we still have work to do in the U.S., levels are in a much better position, and we will continue to transition our assortment to the new strategic direction in the second half. In the first quarter, as a result of this strategy to clean down inventory, revenue was down 32%, and margin was down 12.2 percentage points on last year. In Australia, revenue was down 36% of what was a very strong prior corresponding period, and in the U.S., revenue was down 26%.
The good news is that our strategy is starting to gain traction, and we've seen strengthening in revenue in the second quarter, with new ranges performing well in the current environment. The revenue is down 29% on the prior corresponding period. However, November month to date is 22% and is showing weekly improvements as we head into the important Black Friday and Christmas period. Some of the highlights include our comparative store full-price stores have improved through the quarter and are 12% down in revenue, with the new product performing well, and gross margins is above last year. And we are almost 10 percentage points above the lows of July. So we've seen that margin coming back in Australia. In November, USA sales are 13% below last year and improving through the holiday period, driven by seasonal promotional increases.
Gross margin in the second quarter to date is trending well above last year, and we're on track to achieve our 60% target in the second half. Our key strategic measure of average order value is around 10% up year on year, and at a product level, we're seeing the impacts of our more focused range with improvements in sell-through. We expect to be trading profitably in the second half of FY 2024 as we see the benefits of the strategic review, cost out program, and transition of our assortment. The revenue and margin trend in the second quarter gives me confidence that sales will be where we need them at the peak times, and that we're on track to achieving our financial targets, including being cash positive at the end of FY 2024.
I'm very optimistic about the future for City Chic and have the right team around me to make sure we execute on the key pillars I've outlined today, which will set us on a path to profitability. I want to thank our team for all your hard work this year. We are a resilient group of people that most importantly, care about this customer more than any other group of people could. To the board, I'd like to thank you for your ongoing support for the team and going above and beyond this year, as Michael outlined, through the challenge we faced, most importantly, together in FY 2023. To our customers globally, I know things are hard for you right now. We're doing everything to make you feel your best, hopefully look a bit better with some great products in our store and online.
To our shareholders, thanks for your support in what was another volatile year. Thank you. I'll now hand back to Michael.
Thank you, Phil. And, turning now to the matters formally before the meeting. As the notice has been circulated to shareholders, I propose to take the notice convening the meeting and the items of businesses read. Shareholders will be given the opportunity to ask questions in relation to the business of the meeting during the course of the meeting and before any vote is conducted.... Shareholders will also be given the opportunity to ask general questions about the business and operations of the company, not specifically related to the items of business at the end of the meeting. If you have questions that don't relate to an item of business, we do ask that you save those questions till the end of the meeting.
The company did receive one question prior to the meeting in relation to capital management, and I'll address that at the end of the meeting. You've all been issued with attendance or voting cards. When I call for questions, those with yellow or blue cards are able to ask questions. If you'd like to ask a question, please raise your yellow or blue card, wait for a microphone, then please stand and state your name, then you can proceed to ask a question. If you happen to be holding a red attendance card, that means you're a visitor and not a shareholder, and as a result, you don't have the right to make a question or a comment.
For shareholders and proxies, I will ask you to confine your questions to matters relevant to the particular resolution that's being considered, and I'll do my best to answer them or to direct them to the auditor or a member of the board or executive team as appropriate. After questions, where there is a resolution to be put to the meeting for a vote, I direct that a poll will be held, and now open the poll on each of the resolutions one through to three. A representative from Link Market Services will act as Returning Officer and Scrutineer for the poll. If you are here today, both as a shareholder and a proxy, you will need to use separate voting cards in relation to your own shares and shares you are voting as proxy.
The blue cards are non-voting cards, which are issued to shareholders who have already voted by proxy and to joint holders who can speak to ask questions at the meeting. If you hold a yellow card, this is for voting as a shareholder and/or as a proxy holder, including as represented by a corporate representative, attorney, or proxy, where the vote is at the proxy's discretion. You will be asked to vote at the appropriate time on the resolutions to consider the adoption of the remuneration report, the re-election of Mr. Neil Thompson, and the proposed grant of performance rights to the CEO. Resolutions one through three are ordinary resolutions, and they'll be passed by a simple majority of the members present and voting in person or proxy.
For those of you holding yellow cards, to fill these out, you will find instructions and all resolutions are printed on the front of the cards. To vote, simply place a mark in one of the four Against or Abstain boxes for each resolution. If you mark Abstain, your vote will not be counted for that resolution. If you need to leave for whatever reason before the end of the meeting, please make sure you put the completed voting form in the poll box at the registration desk by the door. And I encourage shareholders and their representatives to complete the yellow voting cards after each resolution has been discussed. The conclusion of the meeting, please ensure you have marked your votes for the respective resolutions. A representative of Link Market Services will collect the voting cards after all resolutions have been discussed.
If you need assistance at any time, please signal to one of the representatives of Link Market Services. Now, moving to the ordinary business of the meeting. The first item of business on the agenda is to put before the meeting the annual report of the company and its controlled entities for the 2023 financial year, including the financial statements and the reports of directors and the auditor of the company. These documents have been made available to shareholders and are also available via the ASX platform and the company's investor website.
There's no vote required on this item of business, and I now invite any questions in relation to those reports, including any questions of the company's auditor relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements, and the independence of the auditor in relation to the conduct of the audit. Are there any questions relating to these reports or the audit? Yes, sir.
I probably need a microphone, if that's okay. Thank you.
My name is [Corny Remo] . I'm representing myself, managed through the fund. I'm just wondering what the current stock level is and what the current cash position is. I'm looking at the balance sheet as at, I guess it's the second of July, where the cash was about AUD 12 million, and the stock was about AUD 54 million, which I know has come down quite considerably. I mean, the stock has come down considerably over the year, but I'd like to know what the current cash position and stock position is now, please.
Well, we're operating well within the covenants. Obviously, we haven't disclosed that at this particular time in Phil's presentation. The stock is operating at a level slightly higher than the 54, I think is fair to say at this time, because of the newness that we've brought in, but we do expect that to reduce very quickly. I think, Peter, correct me if I'm wrong, by the end of the year, the stock levels are forecast to be below the half-year level.
I'm sorry, did you tell me what the cash position was at the moment?
No, I didn't tell you what the cash position was.
Last year,
I did say-
Why keep that a secret from us?
Well, we're operating well within the liquidity covenants required by the bank, and as I said, the balance sheet is in good shape. It's just not something that we, as you know from last year, traditionally reveal at this time of year.
It's quite revealing to shareholders. Now, but that's the reason I asked the question.
What I will do then, sir, is I'll take that on notice-
Yeah.
And we have a board meeting after this, and we'll publish that if we think that's a fair question to ask at this time. Are there any other questions? As there are no further questions, we'll move to the second item of business, which is the consideration of Resolution 1, to adopt the remuneration report, which is included in the director's report in the annual report. In accordance with the Corporations Act, the vote on this resolution is advisory only, and the outcome is not binding on the board. Of course, the board will take this resolution very seriously, and the board will consider the outcome of the vote and feedback from shareholders at the meeting when considering the company's remuneration policies.
In the report, we have endeavored to provide shareholders with detailed disclosure regarding the terms of, and rationale behind, the company's remuneration framework for FY 2023. We believe that City Chic's remuneration approach provides good alignment between business objectives, shareholder value, and the executive remuneration, which motivates and retains talented executives. As outlined in the FY 2023 rem report, shareholders will have noted that following the release of the company's half-year result, all of the non-executive directors agreed to a reduction in their remuneration. Of course, I've announced another one today, and all executives participating in the company LTI plan elected to forgo the entitlement to the grant of the FY 2023 LTI, reflecting the performance of the company.
In addition, as shareholders will have read in the notice of meeting, the CEO has agreed to a reduction in his fixed remuneration and has elected to, for alignment with shareholders, to take all variable remuneration, that is his STI and LTI and long-term equity-based performance rights, as outlined in Resolution 3. Are there any questions or comments concerning the remuneration report? Okay. Noting that each director has a personal interest in their own remuneration from the company, as set out in the remuneration report, shareholders are asked to adopt the remuneration report and vote in favor of Resolution 1. The proxies which have been received, in relation to this resolution are now shown on the screen.
For proxies open at my discretion, I intend to vote them in favor of the resolution and will now pause for a moment to give you an opportunity to complete the yellow voting card for Resolution 1. Please retain your voting cards, which will be collected by representatives of Link once voting on all resolutions on the yellow card have been completed. The next item on the agenda is the re-election of Mr. Neil Thompson as an independent non-executive director of the company. Biographical information! Sorry, Paul. That's too much information, I think. Biographical information is available about Neil in the notice of meeting. Neil joined the company in August 2021. He's an independent non-executive director. He's the chair of the Audit and Risk Committee, and he's a member of the People, Culture, and Remuneration Committee.
Neil has significant financial, operational, and strategic experience from a broad range of senior strategy and finance roles across various industries, including freight and logistics, industrial products, and more recently, technology. Neil was previously chief financial officer of Ascender, a leading payroll services company across Asia Pacific, and prior to Ascender, Neil served as CFO or finance director across a number of listed and private equity-backed business. Neil's currently a director of the Australian World Orchestra and also serves as finance operating partner with Australian private equity firm Potentia Capital. The re-election of Neil Thompson is unanimously recommended by the board, with Neil, of course, abstaining. Are there any questions in relation to this resolution? If there are no questions, the proxies received in relation to the resolution prior to the meeting are shown on the screen.
For proxies open at my discretion, I will vote in favor of the resolution and will now pause for a moment to give you an opportunity to complete your yellow voting card. Again, please retain the cards until all voting has been completed. Okay. The last item on the agenda is Resolution 3, the proposed issue of performance rights to Managing Director and Chief Executive Officer, Phil Ryan. As outlined in the notice of meeting, Mr. Ryan, with approval from the board, has agreed to forgo his cash-based short-term incentive and receive his full entitlement to variable pay as deferred equity under the Equity Incentive Plan.
Also effective from today, with the date of the AGM, Mr. Ryan has elected to accept a reduction in his fixed rem, and it is this reduced amount that has been used for the purposes of calculation for the entire grant for FY 2024. In the circumstances where the company looks to rebuild following several years of uncertainty and unforeseen challenges, the board has decided to grant Mr. Ryan FY 2024 performance rights with an EBITDA performance condition measured over a three-year period, together with a service condition measured over four years. The board's view is that EBITDA margin is one of the most accurate ways to measure the rebuild of the company and ensure management are all working towards the one goal....
The board believes this grant and the EBITDA margin performance condition creates an alignment between Mr. Ryan and shareholders, and are the appropriate incentive to encourage focus on creating value, enhancing profitability, and driving an increase in the value of the company.
This resolution seeks to obtain shareholder approval for the purposes of ASX Listing Rule 10.14, for the grant of performance rights under the Equity Incentive Plan to Phil Ryan on the terms outlined in the notice of meeting. As outlined in the notice, the performance rights will only vest, and Mr. Ryan will only receive shares upon vesting of all or some of the rights if the stated vesting conditions, being the performance and service conditions, are achieved. The non-executive directors believe that the proposed grant of performance rights to Mr. Ryan is appropriate and in the best interest of the company, and we therefore recommend that shareholders vote in favor of this resolution.
Are there any questions in relation to this resolution? There are no questions. The proxies received in relation to the resolution are shown on the screen, and for proxies open at my discretion, I intend to vote in favor of the resolution. We'll now pause for a moment to give you an opportunity to complete the yellow voting card for Resolution three. Now, as this is the last of the resolutions to be considered, once you've completed the voting card, please provide it to the representatives of Link Market Services. Are we collecting those now, or are we collecting them at the door? Oh, you're collecting them now. Excuse me. Excuse me.
Thank you.
Okay, so it looks like all voting cards have been collected, so I will... Oh, no, not quite. Any more? No. Okay, I will now declare the poll closed. We will announce the results of the poll via the ASX platform as soon as possible after the meeting. Ladies and gentlemen, that concludes the formal business of the meeting, and I now declare the meeting closed. We'll now take general questions about the company, not related to the items of business. Prior to taking questions from the floor, I'll address any questions received from shareholders prior to the meeting. Company Secretary, I believe we've only received one prior question, and that question was: Would you consider a complete rebrand? The product and brand is dated and needs a complete overhaul.
Our response to the question is, both City Chic in Australia and Avenue in the USA have a strong brand heritage and recognition, and are well-established brands in both markets. Our market research, in fact, as recently as some research I was looking at yesterday, continues to confirm this position. Now, that said, as you heard from Phil, we are constantly updating product to reflect what our customers, to reflect what are our customers' needs and, of course, the general fashion trends of the time. Are there any further questions? Yes, sir.
It's [Corne Remo] again. Sorry for-
No.
monopolizing the questions on the floor.
Not at all.
I'm just interested in the strategic review. Was that an internal or external review?
It was done externally with the assistance of GNG Partners, who are ex-McKinsey partners, who started their own firm. And Phil, I think it took place over three months?
Yeah.
That'd be right to say. And that was completed towards the end of the financial year, and you might recall in that Phil announced the results of those in the August results. And hopefully today, somewhere between Phil and me, we managed to demonstrate that we took those actions, and the costs are obviously traveling well ahead of where we were hoping they would be traveling. It's important to reset the cost base in the current circumstances. But also, the exciting thing is that the product or the refocusing on the customer and the refocusing of the product is really starting to pay dividends, as Phil was talking about. In fact, I believe the late-breaking news is the stores actually comped positively yesterday. So we're all very delighted to hear that.
I mean, to some extent, it's back to basics, is it, or not?
It's back to what made us great, but with a few tweaks and changes. Do you want to add to that, Phil?
Yeah. I wouldn't go to basics, but it's back to what we know, Barney, I would say. I think, you know, we grew very fast, very quickly, with a lot of assortment and range. And what we've done very well for a very long period of time is understand who this lady is and how to deliver a product that has that higher value to her, and really refocusing on what she wants and getting that product mix right. And that's what we've done. That was the cornerstone of our success. Back to basics is probably a good way to articulate it, but yeah, doing what we do, doing what we know well, and making sure we're putting her at the center of it and making sure we're getting something that she values.
I mean, I ask that question because as a poor old lady, 70-year-old fellow who relies on his self-managed super fund, and I have a paper loss of AUD 30,000 on the basis of my shares in this company, I'm interested to know whether you think, as a result of all this, I'm likely to recover that possible paper loss, and I presume you'd expect that.
Absolutely, and I can... As a fellow shareholder, I'm sitting on a loss considerably in excess of that, so I feel your pain, sir.
Yeah.
But, you know, what we want to do is make this business great again. We know how to do it. We've done it over many years, two decades. We've done it over a decade in the USA, and that's what we're focusing. So that's the job, and we accept that task, and we accept accountability for getting your AUD 30,000 back and a lot more than that on top.
Right. Thank you.
Any further general questions? Okay, well, appears there's no further questions, so let me thank you all for your attendance and participation in the meeting. For those who've joined on the webinar, this concludes the broadcast, and we thank you for your attendance. For those attending in person, I invite you to join us for morning tea outside in the corridor there. Thank you.