French Connection made a pre-tax loss of £7.2m over the year to January 31, 2013 – but has maintained a strong net cash position.
The premium retailer saw revenues drop by 8% to £197.3m last year from £215.4m in the previous 12 months. Its loss comes on the back of a profit of £4.6m in the year ending January 2012, and excludes the £1.3m it cost to close and dispose of some of French Connection’s stores, as well as a £2m write-down on goodwill.
But the business remains cash-positive, with closing net cash of £28.5m – although this is down on last year’s £34.2m. It has no debt.
A statement released this morning said results were in line with expectations.
Chairman and chief executive Stephen Marks was upbeat, noting the business was poised to “to improve our financial performance in this most difficult and competitive of markets” thanks to new initiatives “to provide new impetus to sales growth”.
He added: “Although it is very early days in the new year, we have seen a better performance in UK retail, and we expect this to build as the year progresses. We are managing the business tightly in order to increase full-price sales volumes, limit discounting, manage inventory levels, control cash and build confidence with our customers.
“We have demonstrated our ability to produce fashionable, wearable products over the last 40 years and will continue to do so with a new and talented design team. With the help of the broad range of improvements in our business, a strong balance sheet and our global brand strength, we will return the business to profitability.”