French Connection losses shrink as non-execs replaced

The embattled fashion chain posted a pre-tax loss of £5.7m in the six months to the end of July, an improvement on its £7.9m loss the previous year.

Its bottom line moved in the right direction despite group sales slipping 1.6% to £68.1m during the period.

The closure of seven stores during its first half sparked a 7.5% drop in retail sales to £38.5m, but like-for-likes were “broadly flat”, French Connection said.

Board re-shuffle

The retailer and brand also revealed two changes to its board, after non-executive directors Claire Kent and Dean Murray, who had come under fire from activist investors, stepped down after almost a decade in their respective roles.

French Connection said the duo had been replaced by former Very Exclusive boss and MyWardrobe.com co-founder Sarah Curran and ex-Moss Bros finance boss Robin Piggot.

Curran has become chairman of the remuneration committee and a member of the audit committee, while Piggot will serve as chairman of the audit committee and sit on the remuneration committee.

Both have joined with immediate effect as French Connection chairman and chief executive Stephen Marks bids to transform the company’s fortunes.

Tensions between Marks, who retains a 42% stake in the business, and investors have escalated following five years of consecutive losses.

But Marks hailed “positive momentum” in the first half of its financial year and said he was “confident” that French Connection would return to profit “in the near future”.

The business said that retail sales had been “held back to some extent” during its first half after cutting back on the levels of Sale and clearance lines available on its website.

Ecommerce now represents 29.2% of its overall retail sales, up from 26.5% a year ago.

‘Positive momentum’

Sales in its wholesale division climbed 7.2% to £29.6m, although the increase was just 2.6% when measured on a constant currency basis.

French Connection attributed this to a return to growth in the UK, Europe and North America, where US department store sell-through rates were “particularly” good.

French Connection added that its licence agreement with DFS was performing well and said it was “in active discussions with several interested parties” on a shoe licensing business.

French Connection founder, chairman and chief executive Stephen Marks said: “We have definitely seen positive momentum build in the first half of the new financial year with improvements across all the divisions despite difficult trading conditions.

“I am confident that we will see a good performance during the rest of the year. We have been working with the goal of returning the group to profitability as soon as possible and, while there is still much to do, I believe that we have made significant steps to achieve that in the near future.”