French Connection in the red after ‘worse than expected’ trading
French Connection reported a loss last year after trading in the second half was “considerably worse than expected”.
The figures
The high street retailer this morning said it fell to a loss of £2.9m last year compared to profit of £800,000 in the comparative period.
Group revenue fell 11.4 per cent to £119.9m due to the planned closure of 18 sites and the ongoing difficult trading environment in the UK.
Wholesale revenue was down 4.8 per cent overall but jumped 15.7 per cent in North America.
Why it’s interesting
French Connection said the overall result for the year was “disappointing”, following good progress in the first half of the year. In January it said it expected to post a loss before tax of between £1m and £2m.
Performance in the final six months of 2019 was “considerably worse than expected”, particularly during the fourth quarter in the UK.
French Connection shuttered 11 stores, including its Oxford Street branch, three outlets and three concession sites during the year, with a further two expected to close this year.
Overall retail revenue was down 20 per cent, including a dip in like-for-like sales of 2.5 per cent. The poor performance in the UK was partially offset by improvements in the US.
The retailer, once known for its controversial FCUK branded clothes, took itself off the market in January after first announcing it was up for sale in October 2018.
What French Connection said
Chairman and chief executive Stephen Marks said: “The performance this year has not been as anticipated and we are not being assisted by the continued difficult trading conditions in the UK and potential uncertainty due to the Covid-19 coronavirus.
“I am however, pleased wit the continued good performance of the wholesale business in the USA and we have good forward order banks in the UK to be delivered during the first half of the year.
“The initial reaction to the winter ranges has been positive, particularly at our recent New York Fashion Show.
“We believe the trading landscape in the UK is unlikely to improve in the short term and this has a potential impact on both the retail and wholesale businesses.
“Against this background, we are working hard to ensure we are operating as efficiently and cost effectively as possible while working closely with all our trading partners to maximise business with them.”