French Connection revenue down 53% during first half of 2020

French Connection revenue down 53% during first half of 2020
French Connection CEO says "we are well positioned to navigate an extended period of uncertain consumer demand."
// French Connection reveals revenue plunged 53% during nationwide lockdown
// Retailer saw losses deepen to £12.1m
// French Connection notes it has finance in place to provide funds going forward

French Connection saw group revenue fall 53 per cent year-on-year to £23.9 million after the nationwide lockdown forced its stores to close.

In the first half of the year to July 31, the business saw its losses depend to £12.1 million compared to a £3.6 million loss for the same time the year before.

French Connection said the permanent closure of 9 “non contributing” locations during that time had contributed to the sharp drop in revenue.

READ MORE: French Connection secures £15m funding

As with all retailers deemed non-essential, French Connection’s stores and concessions were closed from March 23.

The retailer noted a significant improvement across all territories for its online sales, which rose 8.1 per cent to the end of July.

Its wholesale business had made some dispatched to online customers during lockdown, but French Connection said the majority had closed for the period.

Wholesale revenue fell by 49.3 per cent to £13.8 million.

It noted the government’s furlough scheme and business rates holiday had helped it reduce costs.

Overall, French Connection made a £12.2 million underlying loss in the first six months of 2020, compared to a £3.6 million loss the same time a year before.

“Despite the unprecedented difficulties we continue to face alongside the rest of the High Street, having been able to secure the necessary financing we feel that we are well positioned to navigate an extended period of uncertain consumer demand but also ready to capitalise on any opportunities that may arise especially given the good performance of wholesale, while maintaining a very tight control of costs,” chief executive Stephen Marks said.

Looking ahead, French Connection said trading remain uncertain given the “recent revision” of government advice, which has impacted footfall and therefore sales at its stores.

The group said it had seen a good reaction to its Winter collection so far, but that sales were promotion-driven.

It also added it had finance in place to provide funds going forward.

Back in July French Connection received £15 million cash injection from turnaround specialist firm Hilco Capital to help it mitigate the financial impact of the coronavirus pandemic.

The fashion retailer said the working capital facility with Hilco Capital is for the next two years.

French Connection added that the £15 million “will be sufficient to cover the company’s cash requirements, based on its current conservative expectations of future trade”.

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