UK: French Connection full-year loss narrows
- FY pre-tax underlying loss of GBP4.4m versus GBP7.2m
- Revenue down 4% to GBP189.4m
- Company remains confident in outlook
Revenue was down 4% on a reduced store portfolio
UK fashion retailer French Connection has narrowed its full-year loss as efforts to turnaround the business continue to gain traction.
The underlying pre-tax loss excluded store closure costs which amounted to GBP1.7m (US$2.8m) in the year to 31 January. After taking this into account, the company's pre-tax loss contracted to GBP6.1m from GBP10.5m the year before.
CEO and chairman Stephen Marks attributed the improvement to a GBP3.8m reduction in operating losses at its retail division. This was driven out of its UK/European business, through enhanced margins, lower underlying labour costs and the closure of nine non-contributing stores.
"We have accomplished a lot in the past year and will build on that momentum to deliver further improvements," he noted.
"We have seen a positive reception to our spring range and whilst there is still much to do, I am confident that we are on the right path and have the right strategy to drive further progress."
Conlumino analyst Liz Faulkner described the results as "encouraging", but warned that the brand will remain weak if its collections are bland.
"As a retailer that has seemed lost for a good few years now, it is encouraging to see the new team at French Connection's helm driving improved efficiency and range development.
"That said, in a fiercely competitive marketplace, French Connection still lacks the necessary differentiation. Continued investment into range development and pricing will be key if the retailer is to develop a more compelling consumer proposition to layer upon its newly improved operational efficiency."
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