French Connection Group’s turnaround plan is beginning to bear fruit as the retailer narrowed its underlying operating loss to £800,000 for the 12 months to January 31, down from a £4.4m loss the prior year.
The London-based company said the results were boosted by an improved performance in its wholesale division, which was up 4.6% to £75.2m, as well as higher global licensing income. Wholesale now accounts for around 40% of sales.
Like-for-likes in UK and Europe dropped 3% across 2014, put down to a poor performance in the second half due to unseasonably warm weather and strong comparisons. Revenue dropped 5.8% to £178.5m.
During the 52 weeks, it closed nine under-performing stores and said that despite the improvement it is “planning accordingly” for the year ahead.
“In spite of difficult retail trading conditions in the second half of the year, these results show that we have made another step towards returning French Connection to profitability.
“The performance of our wholesale and licensing operations were both encouraging, supported by the continued strength of the French Connection brand worldwide. We have also maintained a tight control of costs and have continued to close loss-making stores.
“Although we are encouraged by forward orders in our wholesale business, trading on the high street remains challenging and we are planning accordingly.”