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French Connection narrows losses

French Connection slimmed down pre-tax losses in its first half, with its UK retail arm making progress in its turnaround programme.

In the six months to July 31 the high street retailer narrowed pre-tax losses to £6.1m from £6.3m compared with the same period in 2012.

Revenue was £89.9m, 6.4% lower than the comparable period last year, which was due to a “softening” in French Connection’s wholesale business and a reduction in the UK/Europe retail business.

The UK/Europe retail business, however, improved gross margin thanks to a reduction in overheads through four store closures and reduced staff costs. A further three stores are expected to close before the end of the year and the chain will continue to consider further closures.

Although like-for-likes were down 4.5%, French Connection said half of this drop related to its decision to move back the start of its summer Sale in an attempt to improve brand equity by having shorter Sale periods.

French Connection said the structure of its collections had changed to ensure the chain had “the appropriate mix of price points and styling”.

Autumn 13, which recently went into stores, has had a “positive” reaction so far, with sales up on last year.

Wholesale revenue in the UK/Europe dropped during the first half due to lower forward orders and in season repeats. However autumn 13 take up as been “encouraging” with the order book level with this time last year. 

The orders it has taken for the spring 14 range is also slightly ahead of last year.

Chairman and chief executive Stephen Marks said: “We have continued to implement significant changes across the business and our new team has now been in place for almost a year. This has led to improved margins, ranges and retail disciplines across our UK business.

“Although it is early days in our turnaround, the underlying strength of the business and the significant global awareness of the brand, coupled with the changes we are making provide the foundations for continued improvement and give me confidence for the future.”

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