French Connection has vowed to drive sales densities in stores after its UK and European retail arm slipped into the red.

Retail revenues in the UK and Europe fell by 3% to £110.8m in the year to January 31, a 1.4% like-for-like drop. The division generated a loss of £1.6m during the year compared with a profit of £300,000 the year before.

French Connection blamed the drop on a contraction in margins due to rising input costs. The retailer said it would improve merchandising and review its 72-store portfolio.

Chief operating officer Neil Williams said in an attempt to drive growth the retailer was working on presentation in stores and was implementing a “less dense” look for visual merchandising on the shopfloor.

He added: “It’s about driving the density within the stores and driving the like-for-like sales. We are concentrating on having the best ranges that we possibly can.”

The retailer will also focus on improving its womenswear ranges, of which sales were outstripped by menswear for the year.

Williams said French Connection, which also has 43 concessions in the UK and Europe, would evaluate stores that are not performing as well as others and between three and five stores could either be closed or downsized.

Group pre-tax profits at the group’s core continuing operations, excluding Nicole Farhi, which was sold for £5m last March and its Japanese business that closed last year along with a number of stores around the world, climbed to £7.3m from £700,000 the year before, helped by the improved wholesale performance and better margins.

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