• H1 loss of GBP7.9m versus GBP3.9m
  • Group revenue down 9.8%
  • CEO describes trading period as “tough”
French Connection saw its first-half loss widen to GBP7.9m

French Connection saw its first-half loss widen to GBP7.9m

A “disappointing” performance of its spring collection pushed UK fashion retailer French Connection to report a steeper loss in the first half, delaying its return to profitability.

The company's net loss amounted to GBP7.9m (US$12.3m) for the six months to 31 July, compared to GBP3.9m in the same period of the prior year.

Group revenue declined 9.8% to GBP75.8m from GBP84m, due to store closures and the poor performance of its spring 2015 collection. Retail revenues fell 14.6% to GBP42.6m, while wholesale fell 2.6% to GBP33.2m.

French Connection closed six stores during the period, with 3-4 more targeted in the second half.

Gross margin slipped to 45.5% from 47.4%, hurt by the higher mix of wholsale sales and discounting activity.

“As anticipated in our April trading update it has been a tough trading period for us and we have responded accordingly to ensure we deliver improvements going forwards,” said chairman and CEO Stephen Marks.

He added that it has made operational and personnel changes to drive improvements in performance, notably in design and merchandising.

Retail trading over the first six weeks of the second half has been “stronger”, with UK/Europe like-for-like sales flat. Within that, full price like-for-like sales are up 6% with improved gross margins against the prior year.