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French Connection swings to loss in 'difficult' UK market
10th Mar 2020 07:51
(Sharecast News) - Fashion retailer French Connection said on Tuesday that it swung to a loss in the year to the end of January 2020 as sales fell in a "difficult" trading environment.
The company swung to a underlying loss of £2.9m from a profit of £0.8m the year before as sales declined 11.4% to £119.9m, dented by the planned closure of stores and "the difficult retail trading environment" in the UK.
Wholesale revenue was down 4.8%, but up 15.7% in North America, with "good progress" being made with all the department stores there, especially Bloomingdales and Nordstrom.
In the UK and Europe, like-for-like sales declined 2.5%, which the group said reflected poor UK retail trading conditions on the High Street in the second half of the year.
French Connection said the planned closure of non-contributing stores continued during the year, with 11 stores and three outlets shut.
Chairman and chief executive Stephen Marks said: "The performance this year has not been as anticipated and we are not being assisted by the continued difficult trading conditions in the UK and potential uncertainty due to the COVID-19 coronavirus.
"I am however, pleased with the continued good performance of the wholesale business in the USA and we have good forward order banks in the UK to be delivered during the first half of the year. The initial reaction to the winter ranges has been positive, particularly at our recent New York Fashion Show."
Marks said the trading landscape in the UK was unlikely to improve in the short term.
"Against this background we are working hard to ensure we are operating as efficiently and cost effectively as possible while working closely with all our trading partners to maximise business with them."
At 0920 GMT, the shares were up 5.1% at 19.44p.
The company swung to a underlying loss of £2.9m from a profit of £0.8m the year before as sales declined 11.4% to £119.9m, dented by the planned closure of stores and "the difficult retail trading environment" in the UK.
Wholesale revenue was down 4.8%, but up 15.7% in North America, with "good progress" being made with all the department stores there, especially Bloomingdales and Nordstrom.
In the UK and Europe, like-for-like sales declined 2.5%, which the group said reflected poor UK retail trading conditions on the High Street in the second half of the year.
French Connection said the planned closure of non-contributing stores continued during the year, with 11 stores and three outlets shut.
Chairman and chief executive Stephen Marks said: "The performance this year has not been as anticipated and we are not being assisted by the continued difficult trading conditions in the UK and potential uncertainty due to the COVID-19 coronavirus.
"I am however, pleased with the continued good performance of the wholesale business in the USA and we have good forward order banks in the UK to be delivered during the first half of the year. The initial reaction to the winter ranges has been positive, particularly at our recent New York Fashion Show."
Marks said the trading landscape in the UK was unlikely to improve in the short term.
"Against this background we are working hard to ensure we are operating as efficiently and cost effectively as possible while working closely with all our trading partners to maximise business with them."
At 0920 GMT, the shares were up 5.1% at 19.44p.