French Connection has outlined a number of initiatives to help revive the business after the high street retailer fell into the red in the first half of the year.
The company made a £6.3m loss compared to a £700,000 profit for the same period last year. In the six months to July 31 revenue dropped 7% to £96.0m from £102.8m in the same period last year. The company said this reflected a decline in revenue in its UK/Europe retail division, as like-for-like sales in this division declined by 9.5%. Wholesale revenue in the UK/Europe division fell 11% to £18.1m.
Gross margin was also affected by increased promotional discounting in the retail business, falling by 2.3% to 47.7%.
In March the retailer announced that it would extensively review its UK retail business. This has now been concluded and as a result French Connection is targetting store improvement with enhanced selling skills and better customer service plus improvements in its buying so it can react faster to bestselling lines and changing trends.
Chairman and chief executive Stephen Marks said: “The operational focus of the initiatives is on improving our store operations, developing our product offering and improving merchandise management. In addition we have strengthened our senior management team and will continue to target the disposal of loss making stores.”
The company said it is confident that the initiatives being implemented will result in a “steady and significant improvement” in revenues and gross margins and will therefore have a positive impact on group profitability over the next two years.
Marks added: “We recognise that the route to sustained recovery is likely to take some time but we are committed to building on French Connection’s core strengths; our highly recognised and well-regarded brand, our long history of producing desirable, fashion forward products, our proven sourcing ability and the commitment and passion of our staff.”