French Connection swung to an underlying loss of £2.9m for the year to 31 January compared to a profit of £0.8m in 2019, as a result of planned store closures and a “difficult retail trading environment”.
Group revenue at the retailer fell by 11.4% to £119.9m for the year.
UK and European sales had a 2.5% like-for-like decline, which the retailer blamed on ”poor UK retail trading conditions on the high street generally in the second half of the year”.
Wholesale revenue dropped 4.8%, although saw a 15.7% lift in North America. This strong US performance was attributed to “good progress” made with department stores including Bloomingdales and Nordstrom.
The retailer, which announced it is no longer in a formal sale process last month, closed 11 stores, three outlets and four concessions in the period. Included in these closures was the retailer’s Oxford Street store in May. The Duke Street Studios concept store opened nearby to maintain a West End presence.
After failing to find a buyer, French Connection is now further focusing on “right-sizing” its portfolio.
The retailer said: “negotiations on individual properties have become considerably more favourable, and while not always enough to ensure we remain in the store, certain locations have continued to be traded given the improved economics”.
A further 2 locations are expected to close this year.
French Connection also plans to increase investment in its online platform, focusing on growing its wholesale business - particularly in the US, and increasing its licensed categories.
Commenting on the results, Stephen Marks, chairman and chief executive said: ”After making further progress during the first half of the year, the overall result for the financial year is disappointing. Performance during the second half has been considerably worse than expected, reflecting the continued difficult trading conditions and a shift in the phasing of wholesale deliveries to customers into the New Year.
”We believe the trading landscape in the UK is unlikely to improve in the short term and this has a potential impact on both the retail and wholesale businesses. Against this background, we are working hard to ensure we are operating as efficiently and cost-effectively as possible while working closely with all our trading partners to maximise business with them.”