French Connection reports flat like-for-likes

The company said the results for the 16 weeks to November 20 reflected the fact that more autumnal weather in 2012 compared with last year had driven sales of coats and knitwear. The result compares with a “disappointing” like-for-like decline of 9.5% in the first half of the year when French connection made a pre-tax loss of £6.3m against a pre-tax profit of £700,000 in the same period last year.

French Connection said pre-tax profits for the third quarter were “broadly in-line with our internal expectations”.

The company said wholesale revenues across the UK and Europe continued to be below last year as a result of lower forward orders and reduced in-season business.   

In the period, the retailer appointed Jennifer Roebuck as its multichannel marketing director. She rejoined the retailer last month, after she left as digital director last December to take up the post of marketing director at fashion retailer Warehouse.

French Connection said the implementation of its strategic review outlined in September is “progressing well” despite progress on divesting underperforming stores being “slow” as demand for retail space remains weak.

“The test of operational changes in stores has demonstrated that successful application improves retail sales volumes,” said the retailer. “As a consequence these are being implemented across the portfolio, targeting key stores first. 

“Changes to the way we develop our product ranges have been implemented and these, together with the changes to the design team, have had a positive impact on the autumn 2012 ranges.”

The retailer achieved a £5m year-on-year reduction in stock at the end of October 2012. 

It added: “We remain confident that the initiatives being implemented and tight cost management will result in a steady and significant improvement in the revenue and gross margins in the business and will therefore have a positive impact on group profitability across the next two financial years.”