French Connection cheers steady trading at the start of the year

 
Suzie Neuwirth
BRITISH clothes retailer French Connection yesterday said like-for-like trading in the UK and Europe was broadly flat in the 15 weeks to 11 May.

Wholesale revenues declined in the UK and Europe, while in North America wholesale was down but retail revenues climbed five per cent, the firm said in an update ahead of its shareholder meeting.

Joint ventures in Asia performed well despite the retail market slow-down in China and Hong Kong, resulting in a small profit increase.

“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,” the company said.

Group cash rose to £15.7m, from £10.4m a year ago, which the firm hailed as a sign of tight capital control.

Analysts said the update showed signs of a strong start to the year. “French Connection remains a strong global brand and, with a new focus on change and a series of sensible initiatives being implemented in the UK, we see scope for losses to narrow,” said Numis in a note.

But stock-watchers at Cantor Fitzerald said they do not expect the firm to break even until 2015.

Shares in the FTSE-listed retailer closed 3.1 per cent higher yesterday at 28.20p.