Struggling UK-based fashion retailer French Connection Group has secured GBP15m (US$19m) in funding from turnaround specialist Hilco Capital, after warning in May that it was likely to run out of cash.
The retailer today (24 July) said it would use the two-year working capital facility to cover its cash requirements after being unable to access government support schemes.
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French Connection said initial sales have been low since its stores reopened on 15 June, although sales volumes are growing week on week. Online sales in the UK and US are up 24% over the last 15 weeks, and wholesale business is picking up.
The company has also “worked particularly closely with its stock suppliers, many of whom we have had significant long term relationships with, to actively manage its autumn/winter 2020 inventory commitments to reflect its current expectations of trading during the season.”
Looking ahead, the retailer said it will continue to tightly manage its cost base over the coming months, although “it is too early to predict how quickly and to what extent store footfall and therefore sales will recover.”
However, the board is “confident that the company is well positioned to navigate an extended period of uncertain consumer demand.”
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