French Connection has reported a nosedive in sales and widening losses in what boss Stephen Marks says is ‘the most difficult trading period that the group has ever faced’.
The fashion retailer recorded an underlying loss of £12.2m in the six months to July 31 compared with a loss of £3.6m during the same period the previous year, which it attributed to a “significant decline in sales”.
French Connection’s sales plummeted by more than half, down 53% year on year to £23.9m “predominantly owing to the impact of the Covid-19 pandemic”.
Retail revenue fell by 58% during the period to £10.1m as mandated store closures during lockdown were compounded by the permanent closure of nine of French Connection’s stores during the period, while wholesale revenue dropped 49% to £13.8m.
The fashion retailer’s margins suffered due to the loss of full-price selling time during the lockdown earlier this year and a resulting excess of new and old stock by period end.
French Connection, which secured funding from investment and turnaround specialist Hilco in July, said it has achieved cost savings during the period through rent and rate negotiations, as well as through the government’s furlough scheme.
Chief executive and chair Stephen Marks said: “This has undoubtedly been the most difficult trading period that the group has ever faced and I would like to thank our staff, both those who have kept the business running and those who have been on furlough, for their ongoing commitment to French Connection.
“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.”
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