French Connection plunges into the red with £7.2m full-year loss

However, the retailer is confident trading will improve in its current year as its turnaround gains traction.

French Connection posted a revenue loss of 8% to £197.3m, as sales volumes fell across its retail and wholesale businesses both in the UK and Europe.

Retail like-for-like sales in the UK and Europe declined 7.4%, while like-for-likes at its North American business fell by 4.1%.

French Connection chief executive Stephen Marks said it had made “some progress” in implementing turnaround initiatives unveiled in September last year.

This included closing two stores in its UK and Europe portfolio and three stores in North America. French Connecton said it is in the process of closing one more store and six concessions and expects to close another two stores in the year.

Last year, the retailer had identified 15 stores for closure. It said it is in ongoing discussions with landlords to vacate other stores or renegotiate rents in the UK, Europe and North America.  

Marks added: “The significant changes we have already and will continue to make will help us to improve our financial performance in this most difficult and competitive of markets. Although it is very early days in the new year, we have seen a better performance in UK retail, and we expect this to build as the year progresses. 

“We are managing the business tightly in order to increase full-price sales volumes, limit discounting, manage inventory levels, control cash and build confidence with our customers.

“With the help of the broad range of improvements in our business, a strong balance sheet and our global brand strength, we will return the business to profitability.” 

Other changes the retailer has made include cutting working hours, focusing product to its core customer, developing more flexible buying patterns and it has strengthened its management team, appointing new heads of design, retail, production and a director of multichannel and marketing.

Marks said the online businesses grew “significantly” in the year.

This year, French Connection said it is opening new stores in Asia, India and Eastern Europe, which will use the new shop fit design recently launched in China and Hong Kong.