French Connection Group’s like-for-like sales fell 5.7% in the UK and Europe during the 17 weeks to November 22 due to the unseasonably warm weather, but its full-year profits are still on track to meet expectations.
The group - which comprises French Connection, Toast, Great Plains and YMC - revealed in a trading update on Wednesday that its sales have slowed in recent weeks. However, its refusal to discount, together with an improved underlying margin, have led to a rise in gross profit margin of 240 basis points.
During the period, French Connection marginally reduced the losses in its retail division thanks to savings in underlying operating expenses and the closure of stores. It did not disclose figures.
Three non-profitable stores were closed and two concessions opened in the UK. In Europe a store was opened in Berlin, a franchise store was taken over in Amsterdam and two Spanish concessions opened in El Corte Inglés stores. A new franchise partner also opened a store in Grenoble, France.
Wholesale revenue rose 9% compared with the same period last year and French Connection said the order book for spring 15 is strong.
Group cash flow, during what the company described as a “cyclical low period of the year”, was £8.7m, compared with £10m in 2013.
Chairman and chief executive Stephen Marks said: “As widely reported, trading in UK retail has been tough. While we still have the all-important Christmas period to come, I am pleased to report that the overall performance of the group continued to be positive, particularly in UK wholesale and global licensing, with continued tight cost control.
“We expect the results for the full year to be in line with market expectations.”