UK fashion retailer French Connection Group has dropped plans to sell the company and will instead focus on a turnaround by right-sizing its store portfolio, investing online, and working to grow its wholesale business, particularly in the US.
In a statement today (31 January), the retailer says it has completed a strategic review that began in October 2018 when the group confirmed it was mulling a sale of the business. The retailer extended the period for a possible sale in June last year after noting it was in discussions with several interested parties.
French Connection now says it will build on recent progress, with steps also including renegotiating the cost base of existing stores, and developing new license arrangements to increase its product categories.
The retailer expects to post a pre-tax loss of GBP1m-GBP2m (US$1.3m-$2.6m) for the year ending 31 January 2020 – improving on last year’s pre-tax loss of GBP9.3m – amid the “continued challenging trading conditions on the UK high street.” It notes trading in both the retail and wholesale businesses has been more difficult during the second half of the year, especially during the fourth quarter.
In September, the retailer booked falling revenues weighed down by “extremely challenging” trading conditions in the first half.
French Connection will announce its annual preliminary results on 10 March.
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