British fashion retailer French Connection has seen trade across its UK and European operations improve, reporting flat like-for-like (LFL) sales as the group’s cash position strengthened, it has been announced today.
In the 15 weeks ended May 11th 2013, retail sales remained broadly static thanks to a “strong performance” at the start of the year which has re-emerged in recent weeks after a slowdown in March.
In March, French Connection reported a pre-tax loss of £7.2 million as LFLs dipped 7.4 per cent in its full financial year though the retailer noted that its commitment to a brand turnaround has helped boost sales in 2013.
A statement from French Connection explained: “We are seeing progress from the initiatives that were instigated following the retail review last year and expect the impact of these to grow as the year progresses.
“Gross margin levels were slightly lower than last year.”
Group cash now stands at £15.7 million, up 51 per cent on the same period last year, “reflecting the continued importance being placed on the tight control of working capital as the group continues to operate with a strong balance sheet and no debt.”
Nonetheless, wholesale revenue in the UK and Europe has slowed, remaining below last year as anticipated as reduced forward orders and in-season business impacted sales.
In the US, wholesales figures are also struggling, “reflecting a more difficult start to the year for the US department stores”, though retail sales in the region have seen a jump over the period.
Retail sales climbed five per cent on the same period last year in North America as promotional sales reduced gross margin.
In Asia, French Connection’s joint ventures have “performed well” in spite of what it called a slowdown in the retail market in China and Hong Kong, as profit levels saw a slight boost over the quarter.