French Connection losses narrow amid ongoing sale process

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French Connection
The retailer has extended its strategic review and formal sale process until the end of the financial year
// French Connection returns to sales growth
// Pre-tax losses narrowed in the 6 months to July 31

French Connection has returned to sales growth after its pre-tax losses narrowed in the six months to July 31.

Pre-tax losses were at £4.7 million during the period, against losses of £15.1 million a year ago.

The fashion retailer posted an underlying loss before tax of £5.3 million, a 3.6 per cent improvement on the comparable period last year.

Meanwhile, group sales fell 12.2 per cent to £51 million.

Retail revenues were down 12.8 per cent to £23.8 million but like-for-likes advanced 1.4 per cent.

Wholesale revenues were down 11.7 per cent to £27.2 million.

“There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although our retail performance has been resilient, overall the wholesale business is strong and we continue to see good stability in the licence income,” French Connection chief executive Stephen Marks said.

“The order books we have provide a clear outlook for the second half of the year in wholesale but it appears that retail conditions will continue to be challenging.

“Underpinned by these results we remain fully on track to achieve our expectations for the financial year.”

In October last year, French Connection begun discussions with four potential bidders regarding a sale.

The developments came two weeks after the British retailer revealed it had started looking for a buyer, with Marks ready to sell his 42 per cent stake in the business he founded in 1969.

The retailer is now extending its strategic review and formal sale process until the end of the financial year.

The sale process was lengthened for a second time.

French Connection said ”discussions are still ongoing with a number of parties”.

The retailer reduced its average UK and Europe retail space by 8.2 per cent to 151,000sq ft and cut the number of operated stores and concessions from 103 to 90.

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