The shares of City Chic Collective (ASX:CCX) surged by as much as 21.9% to reach A$0.585, marking their most robust day since March 2020, and achieving their highest level since February 24.

The fashion retailer, after trading hours on Thursday, announced that it had divested its Evans business and EMEA inventory to AK Retail Holdings.

As a result of this divestment, AK Retail will pay the company 8 million pounds in total cash consideration.

City Chic Collective (ASX:CCX) will also close its UK warehouse, and its Navabi brand will cease trading.

Analysts at Morgan Stanley pointed out that the divestment made both strategic and financial sense and should have a positive impact on the company’s stock performance.

They added that the streamlined business should allow more capital and time to focus on more profitable brands and regions, and currently, the company’s stock is the top gainer on the ASX All Ordinaries index.

As of the last closure, the stock had been up by 1.1% YTD.

City Chic Collective (ASX:CCX) is a fashion retailer that recently divested its Evans business and EMEA inventory to AK Retail Holdings.