French Connection reported pre-tax losses of £3.5 million for the six months ended July 31, against a pre-tax loss of £2.5m for the same period last year.
French Connection’s losses included a £1.9m gain on a disposal of a leased property.
French Connection sales were broadly flat over the six months at £112.4m. Within that retail sales in the UK and Europe were up 4.5% to £55.5m but like-for-like sales remained flat.
UK and Europe wholesale sales shrank back 11% to £24.1m. French Connection said that £2.1m of lost sales in its wholesale division came from it switching to a concession model within House of Fraser and Harvey Nichols. It said a further £2.5m worth of wholesale sales would be affected in the second half as it converted a further 10 House of Fraser doors into concessions.
French Connection added that its wholesale customers had also been adversely affected by the difficult retail climate which had impacted on both forward orders and in-season orders to the tune of £600,000.
French Connection chairman and chief executive Stephen Marks said that the brand’s womenswear ranges continued to show improvement and that womenswear like-for-like sales were up 8% in the UK and the US, despite weak consumer spending. He added that the company’s main aim was to build on these improvements and to replicate the improvements in womenswear across its menswear offer.
Marks said: “Against the background of a significant downturn in our major markets, the performance of our retail business has continued to be encouraging, with a resilient overall sales and continued growth in our ladies’ wear division. In total, however, turnover has remained broadly flat, which when combined with increasing pressures on our margins and cost base, means our financial results for the first six months remain disappointing.”
To read French Connection’s full first half results click the attached word document.